Federal low income home loans and programs can help those that cannot afford a traditional mortgage an opportunity to be a homeowner. There is the perception that owning your house is better than renting. With most mortgage lenders, you are made to believe that renting is a waste of money. It is true that owning your house can make you feel safe and you will have something to leave behind for your children; however, you need to think carefully before you decide if getting a loan to buy a house is a wise move for you and your family. The federal government has a scheme called the federal low income home loans. You might think that this is free money but you will be mistaken. In an effort to stimulate the economy, the US government has been encouraging people to invest in homes. That is because buying a house means spending money in various sectors of the economy.
Interest Rates – Credit Scores
Being a low income family doesn’t mean you will not be able to get loans to enter the mortgage market. However, a lot will depend on your current salary, your credit rating, the current interest rate and also the amount of down payment you will be able to make. The federal government low income home loans are a way to get money from banks with government guarantees. The most important thing for everyone interested in owning a home is to make sure you understand a simple fact, how much can you afford? This is an important question because you might end up buying a house you cannot afford and finally losing your house and ending up with the very bad credit rating. The easy way to calculate how much you can spend on a house is adding up all your gross income and subtracting all your monthly expenditures.
Looking at Numbers
Before you start doing anything, you will do well to go to the ginniemae.gov website. This website is very convenient and will allow those interested in low income home loans to get an overview of how much they can afford. The site is quite intuitive and it allows you to add your yearly income, your monthly credit card payments, car payments, and other monthly obligations you might have. For example, if you earn $30,000 per year, the above-mentioned site will give you an estimate of $95,000 as the amount of loan you may receive towards buying a home. This will leave you with a monthly mortgage of $700 that will be spread over the course of many years. This will also take into consideration the down payment of $3000 and other legal extra charges that will go into processing your home loans. FHA, USDA, and some others are good places to start.
When you take a look at the simplified overview above, you will realize that the federal low income home loans don’t guarantee that you will be able to afford the home of your dreams. Nevertheless, for those willing to take the risk, looking into this federal government low income home loans initiative can be worth doing.