We’ve all heard stories about people who are able to purchase a house with a low income. But how exactly do they do it? If you’re wondering how to afford a house with a low income, here are 12 ways that you can make this dream come true.
How to Afford a House With a Low Income
Take heart, it is possible to get your dream home even if you don’t make a lot of money. It won’t be easy but these tips will make it a little more affordable.
1. Check out Low-income Home Loans
You should check out the latest information regarding low-income home loans.
These are going to be very important in helping you afford your own home.
While you may not be able to get one right away, it’s a good idea to start looking around now.
Start looking around at some of the lenders that are offering low-income housing loans as well.
These are typically government-backed loans. More about those below.
2. Downsize Where You Live Now
One of the best ways for a low-income family to afford a house is by downsizing.
This is going to take a lot of planning on your part but it can be done.
You can begin by cutting back on all of the unnecessary expenses that you have been spending money on in order to save money for the house.
If you can reduce your housing costs now, you can save that money for a downpayment later.
The larger the downpayment, the smaller your monthly mortgage payments.
Consider renting out a room or moving to a smaller apartment.
Share utility costs with a roommate.
If you can decrease your housing costs by 50 percent, you will be well on your way to having the money to buy your own home.
3. Check out VA Loans for the Military
Another important way to help a low-income family afford a house is to check out the VA loans for the military.
This is an option that has been used by many military families over time and it’s still a popular option today.
If you or your partner were or are in the military then you might qualify for a VA loan depending on both of your incomes.
4. Get Incentives From Your Job
If you are planning on buying a house with a low income, then you should start looking into getting incentives from your job.
It may take a lot of negotiating, but if you are able to get some extra benefits from work, then this could be very helpful to your situation in the future.
If you work for a large corporation, your employer may have benefit programs that help with the downpayment or in obtaining a loan, or even covering closing costs.
5. Check Out FHA Loans for First-Time Home Buyers
One of the most popular low-income home loans is the FHA loan for first-time homebuyers.
These are usually a popular option for first-time buyers because they come with lower interest rates and you can get a lot more savings from your down payment.
This is a government loan program.
Instead of having to put down 20 percent when buying your new home, you can put down as little as 3.5 percent.
FHA loans also accept lower credit scores as well.
6. Get Help From Your Family
If your family is able to help you out, then this is going to be one of the best ways for you to afford your own home.
Talk to your family about getting a loan or mortgage together in order to afford this.
Your family might also be willing to give you money for a downpayment or closing costs.
7. Sell Some Things To Save Money
One of the best ways to help a low-income family afford their own home is by selling some things from around your house that is not needed.
If you have some items that you would rather just get rid of, then you should try selling them online or in-person at a garage sale or something similar.
You can sell almost anything today. Children’s clothing, your clothing, DVDs, or any old tech you have around the house can be sold.
They say everyone has around $3,500 dollars worth of stuff in their home that they aren’t using.
Sell it on eBay and use put that money towards your house.
8. Ask Someone to be a Co-Borrower or Guarantor
One good way for a low-income family to afford a house is by having a co-borrower or guarantor on the loan.
You can either ask someone in your family to do this or you can ask a friend or someone you trust.
This way, if you are unable to make the payments, they will be willing to help out and you won’t lose your home.
The bank might look more favorably on your loan application if your credit scores are not what they should be but you have someone that will make the payments if you can’t.
9. Get A Second Job
No one likes the idea of having a second job.
Working one is bad enough.
But if you are determined to buy a house, then a second income will help you get there.
It’s up to you to decide just how badly you want your own home.
10. Check Your Credit Before You Start Looking at Houses
You should check your credit before you start looking at houses.
If it isn’t very good, spend some time improving your score before you start house hunting.
The better your credit score, the more likely you will be approved for a mortgage.
Also, the better your credit score the lower your interest rate will be.
That means your monthly payments will be lower as well.
Mortgages with lower interest rates can save you thousands of dollars over the life of the loan.
You can get a free copy of your credit report each year from the three major credit bureaus.
11. Consider Buying a Home in Foreclosure
You might want to consider buying a home in foreclosure.
While it’s not always a good idea to do this, you may be able to get the home for a lot less and save yourself some money in the long run.
You might have to fix the place up, but if you are good at that sort of thing then you can save yourself a lot of money and still have a really nice home once you finish any necessary repairs.
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12. Look Into Government Grants
Another important thing that you should look into when trying to afford your own home is government grants.
There are many different kinds of government grants out there today, so look into them before you begin looking at houses.
You just might find something that will help you out.
Just google government grants for low-income home buyers.
13. Check to See If There Are Any Housing Assistance Options in Your Area
If you are thinking about buying a house, then you should look into this option and see if it’s right for your situation today.
Ask your bank if they know of any programs that might work for you.
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To Sum it All Up:
You don’t need to give up on your dream of owning your own home because of your low-income level. Yes, it does make buying homes more difficult, but it’s not impossible. Start working on your credit score now and cut back on your expenses to start saving for a downpayment. If you’re a first-time homeowner be sure to check out FHA loans.