Buying A Home With A Low Income
Posted on: 7 November 2019
Are you and your family tired of living in apartments? Dealing with nosey landlords and living so close to your neighbors can eventually become unbearable. You decided that you want to buy a home, but your low income is preventing you from qualifying for a large enough mortgage loan for a good house.
Improve Your Credit
If you can push off buying your home a little longer and work on improving your credit score, you will be able to lower your interest rates on your mortgage loan. This will allow you to purchase a slightly higher-priced home. Aside from your credit score, you can also work on improving your debt-to-income ratio. By paying down some of your credit cards and other lines of credit you will have lower monthly payments.
Put down as Much as You Can for a down Payment
If you can manage to put down a higher down payment, you should certainly do so. Everything you put down will be deducted from the total cost of the home. If you only qualify for a $180,000 mortgage loan with no down payment, you would qualify for a $200,000 mortgage loan if you can put down $20,000. It's worth it to wait a little longer before purchasing a home in order to save up enough money for a large down payment.
Consider a Multi-Family
If you decide to buy a multi-family home, you can use the potential revenue you will make from the units you rent out as income towards qualifying for a higher loan amount. For example, if you only qualify for a $120,000 single-family home, you will qualify for a higher amount if it's a multi-family home. If your reason for wanting to buy a home rather than continue renting is you don't want to have annoying neighbors living in such close proximity to you, consider renting your other units to people you love and trust. Do you have any family members or close friends who would be interested in renting out a unit?
Choose a Home That Needs Some Work Done
If you're a handy person, you can find houses for sale that require some work. You will get a much better price on a home if it needs some things fixed up, even if those things will be relatively inexpensive to repair. Once all of the repairs are complete, you will have a home that would have otherwise been way out of your budget.
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