Finding the home of your dreams can be cheaper and easier than you think.
The decision to quit paying rent and to purchase a home is a significant one, and a huge financial investment, especially for those with low incomes. Choosing a great neighborhood for your new home is important, and can offer a refreshing change of scenery when properly selected. On top of mortgage payments, homeowners have to set aside a small sum to handle the costs of repairs that pop up. However, with some preparation you can make home ownership a reality even on a limited income.
Instructions
1. Compensate for your low income by proving excellent credit history. Banks and other lenders can be hesitant to offer mortgage loans to people with low incomes because they are seen as riskier. Improve your credit score as much as possible by keeping on top of your debt and paying it down as soon as you're able. Credit scores above 620 are considered "good" by most lenders; 750 or higher is considered "excellent."
2. Go to the Department of Housing and Urban Development web site, www.Hud.gov, and select your state from the "State Info" list. This will open a list of government programs designed to assist home buyers with mortgage and down payment costs. Browse through and apply to any programs for which you meet the qualifications.
3. Check with your local Rural Housing Authority chapter in person or by visiting www.rurdev.usda.gov to see if you qualify for additional loans or grants. To qualify for RHA assistance, your potential home or property must be located in specific areas of your state. Determine your eligibility easily by visiting the RHA website.
4. Save at least 20 to 30 percent of the purchase price of a home in your price range. Having a large down payment readily available proves a level of sincerity with your bank, making it more likely you'll be approved for a mortgage loan.
5. Ask your bank if it has any mortgage prequalification programs. These programs look at income, credit history, banking history and other factors to determine your eligibility for a mortgage through the bank. Prequalification gives you an advantage when putting an offer in on a home.
6. Look for homes that are smaller or cheaper than the majority of houses on the market in your area. They may offer fewer luxuries and modern amenities, but the lower cost means a greater chance of being approved for a mortgage.
Tags: approved mortgage, credit history, down payment, home your, with incomes
