When you home financing for low income, the last thing you might think about is ever owning your own home. There is nothing wrong with dreaming and keeping your dreams alive. Nevertheless, you need to be realistic and understand the dynamics of home financing for low income. It doesn’t mean you cannot and will never be able to on your own home but you need to be able to separate the dream from reality.
Renting VS Buying
One of the most important things to consider is how much rent you are paying at the moment. If your rent is lower than $500, you might be better off just renting and not worry about buying a house on a mortgage. There is the illusion that buying on a mortgage is better than renting because you invest in the future. What most people fail to realize is that when you own your house, you also need to factor in the cost of maintenance. This is very important because most mortgages are spread over a period of 20 to 30 years. With the current economy crisis, it can be very difficult to get financing if you’re on low income. That is mainly because a lot of banks and financial institutions are no longer willing to take the risk. Even if you have a steady job and a steady income, that will not guarantee you a mortgage. Everyone of course feels that they deserve to be given a chance. When you are dealing with a lot of money and the amount of foreclosures due to reckless lending and borrowing, you will understand why a lot of banks and mortgage lending institutions are no longer willing to help you.
Government Mortgage Programs
If you are so desperate to get into the housing market, you can check out the federal housing administration website. The USDA and FDA programs are great also. The government has a scheme that will allow you to understand the processes of getting finance for low income homes. One of the most important aspects is your current salary. The fact that the local and federal government are willing to help doesn’t mean you should not play your part. You need to be willing to afford the down payment that is often required for mortgages. For someone earning about $50,000 per year, that can work out to about $5000. If you cannot afford the down payment how are you going to be able to afford the mortgage that you will constantly have to pay for a period of 20 to 30 years. Fannie Mae and some others are also good places to look.
All About Location
Another thing to consider when looking for home finance for low income is the location of the house you are interested in and the value of the house in the future. This is important because you might decide to sell and move away to another location or state. If the value in 10 years is lower than the amount you currently owe, you will be stuck with a house that is practically worthless. Home financing for low income people is entirely possible.