International Students: Buying Power And Limitations

International students studying in the US often wonder what they can and cannot buy. This is a complex question with a variety of answers, depending on the item in question. For example, international students can buy a car in the US, but they will need a valid driver's license. Obtaining a driver's license as an international student is possible, but there are certain requirements that must be met, such as active status in the Student and Exchange Visitor Information System (SEVIS) and knowledge of state-specific eligibility and supporting documents. International students can also purchase items for their dorm rooms, such as pillows, sheets, blankets, and comforters, as well as personal care items like toiletries and shower shoes for shared bathrooms. In terms of trading, F1 visa students are allowed to buy stocks, but they must use an Individual Taxpayer Identification Number (ITIN) for tax-related purposes. International students can also sell items online or at local markets, as long as it is not considered employment and does not violate their visa status.

A home in Canada

As of January 2023, the Canadian government has banned non-Canadians from purchasing residential real estate. This legislation, known as the Prohibition on the Purchase of Residential Property by Non-Canadians Act, is in effect until January 1, 2027, and is aimed at increasing the overall housing supply for Canadian citizens and permanent residents.

However, international students in Canada can still buy a home, albeit with certain restrictions and conditions. Firstly, international students must meet the eligibility criteria for a study permit, which allows them to stay in the country while studying full-time. Additionally, they must have been physically present in Canada for a minimum of 244 days in each of the five calendar years preceding the purchase. The purchase price of the property should not exceed $500,000, and the student must not have previously purchased any other residential property in Canada. These criteria are in place to ensure that international students are not purchasing real estate for investment purposes but rather for their own use while studying in the country.

It is important to note that the Canadian Real Estate Association (CREA) requires foreign nationals to have a work permit from the Minister of Immigration to buy residential property. This means that international students with valid work permits may be able to purchase a home in Canada if they meet the eligibility criteria.

Furthermore, international students should be aware of the additional costs associated with homeownership, such as insurance and repair costs. They may also face challenges in obtaining a mortgage due to limited income and credit history. However, some local banks in Canada, such as Scotiabank and CIBC, offer mortgage options specifically for students, although these may come with higher minimum down payment requirements and more stringent conditions.

Overall, while it is possible for international students to buy a home in Canada, it is a complex process with many considerations. Students should carefully research the local housing market, understand the real estate laws, and be mindful of their future plans and financial capabilities before making such a significant investment.

A home in the US

International students can legally own a primary residence or purchase a rental property in the US. There are no laws prohibiting foreigners from owning property in the US, and F1 visa holders can obtain a mortgage. However, F1 visa holders cannot work and must have sufficient funds to pay the full amount or have a large enough down payment.

International students on F1 visas can buy a house in the US without waiting for a green card. F1 visa holders can apply for a standard mortgage, but it can be challenging to secure one as a non-US citizen. Financial institutions may demand higher down payments, increased interest rates, or additional documentation. It is recommended that prospective buyers have at least a 20% down payment and sufficient proof of paperwork.

To navigate the home-buying process, it is essential to work with knowledgeable real estate agents and lenders and understand the local market. Conducting thorough market research to identify neighbourhoods that align with your goals is crucial. International students should also be aware of the potential challenges of owning a home in the US, such as the possibility of significant withholding due to tax liability when selling the property.

Additionally, it is important to have the house inspected by a qualified engineer to identify any structural defects and conduct a title search to ensure clear ownership. While there are no direct immigration status-based restrictions on property ownership in the US, seeking professional guidance from qualified real estate agents, mortgage brokers, tax advisors, and real estate attorneys is recommended.

A car

As an international student, you can buy a car in the US, but there are several things to consider. Firstly, you will need to obtain a US driver's license, which can be done by applying at your nearest DMV or RMV, but there are certain eligibility requirements that vary from state to state. For example, in Maryland, you must take an alcohol and drug education program, a knowledge test, and a road skills test. It is also important to note that some states may require you to have auto insurance before applying for a driver's license.

Once you have obtained your license, you can start the process of purchasing a car. You can either buy a new or used car, depending on your budget and needs. If you are considering a used car, it is recommended to research the car's history and take it to a mechanic for a diagnostic check to ensure it is in good condition. When buying from a private seller, it is important to verify the seller's information and ensure you receive the car title. If you are buying from a dealership, you can choose between certified and non-certified car dealers. Certified dealers offer guaranteed quality used cars and maintenance services, while non-certified dealers may offer lower prices but may not provide the same level of quality and service.

Another important consideration is financing. As an international student, you may face challenges in obtaining an auto loan due to your lack of credit history in the US. Some financial institutions may offer loans to international students, but the requirements and documents needed may vary. Alternatively, you can explore services like Stilt, which specializes in providing low-interest loans to non-US citizens.

Lastly, don't forget about car insurance. It is required by law in the US, and the cost can vary based on factors such as age, driving history, and location. It is recommended to get an insurance quote before purchasing a car to factor that into your budget.

Financial aid

International students in the US have access to some financial aid, although it is limited. Most institutional aid is reserved for graduate studies, and even then, it is competitive. US institutions rarely offer aid to undergraduate international students. However, some public and private universities do offer financial incentives for students to attend their institution. These incentives are usually reserved for graduate studies in the form of assistantships and fellowships.

Undergraduate international students can access need-based scholarships, awarded based on financial need. Academic departments within the university may have funds to assist international students with exceptional need and/or talent. Undergraduate international students can also access free scholarship databases and private, corporate, nonprofit, and government scholarship funds. Some scholarship databases charge fees, but paid and unpaid databases generally offer the same information, so it is not necessary to pay any fees.

Merit-based scholarships are also an option for international students. These are granted based on special skills, talents, or abilities. Some universities offer scholarships based on TOEFL scores, academic record, artistic ability, musical ability, or athletic ability.

International students can also open brokerage accounts with firms that cater to global clients, providing access to the vast array of publicly traded companies listed on American exchanges. However, non-US citizens must navigate a strict identity verification process and may have to jump through extra hoops before investing in the US.

A student visa

International students often choose to buy a car in the US, especially if they don't live with a host family or near a city bus route. While a Social Security Number is not required to purchase a car, it may be required to finance one or obtain auto insurance. In some cases, you may be able to obtain a loan and auto insurance with just a student visa. It is recommended that you contact potential lenders and auto insurers to determine their requirements before looking for a car to purchase.

There are two kinds of car dealers: certified and non-certified. Certified car dealers are the local distributors certified by specific car manufacturers, and car manufacturers guarantee the quality of used cars sold by them. You can also enjoy the maintenance services provided by certified dealers. If you are considering spending less money on a used car and you are not familiar with car mechanics, looking for a non-certified car dealer may be a reasonable choice. CarMax is the largest non-certified car dealer in the US, and just like certified dealers, it guarantees the quality of its used cars and offers maintenance services. However, the quality of the cars may not be comparable to that offered by certified car dealers. If you want to spend a small amount of money on your car (about $5,000 or less), you may consider buying a car from other non-certified car dealers. To minimize fraud, only buy a car from a non-certified car dealer authorized by the State. According to the law, all car dealers must have a license (posted in their office) authorized by the State government.

You can also buy a car from a private individual. If you buy from an individual seller, it is important to make sure that the name and address on the title are the same as the seller's name and address by checking their ID. Also, you should make sure to take the car title from the previous owner when you complete the purchase. When purchasing a car, make sure that you obtain a temporary license plate from the dealer so that you can drive the car while you wait for an official license plate from the county court.

Before buying a used car, it is important to ask about its history. Has it been in any accidents? What mechanical problems has it had, and how were those problems fixed? CARFAX is a paid service that can give you vehicle history reports on any used car. To check the reliability of a car model, check the magazine Consumer Reports. It gives detailed reviews of most cars from the last several years. Many Americans take out a loan to buy a car, but since international students don't have a credit history in the US, they have to pay cash. Most dealers and private sellers will ask for a cashier's check, which can be purchased at your bank, and the bank guarantees the money to the dealer or seller.

Once you have purchased your car, you must register it with the Department of Motor Vehicles (DMV). You must have a valid driver's license and a state ID card to register your car. You will also need to obtain third-party automobile insurance. Failure to obtain auto insurance can result in fines or losing the right to drive your vehicle. Collision (or comprehensive) insurance is not required, but it is strongly recommended as it pays for your expenses in an accident that is your fault. If you do not have collision insurance, a car accident can be very expensive. There are many insurance companies that will give you quotes on their websites.

Frequently asked questions