Homeownership is a great dream that many people realize every year. But when your income is lacking or lower than others around buying homes, it can be frustrating. However, there are many ways for you to realize the homeownership dream and buy to own your own home. Here are some tips to help you buy a house when your income is lower.
Consider a Lease Option
One way in which you can buy a house is to look for a lease option, which is a rent-to-own program. The current owner of a home may list their home for sale and offer to provide a lease option to an interested buyer.
In this transaction, you don't have to pay a down payment on the home or closing costs, but you will have to pay a monthly lease payment toward your buying the home. Part of your payment would go toward your rent, and the other portion would be put into purchasing the home. Make sure you write out the terms of the lease agreement, including the amount of rent payment, how much goes toward the home's purchase, how long you will pay for the home, and the price of the home.
Talk to a Realtor
One of the ways to help you afford a home with a smaller budget is to search for homes in the lower end of the market or those that are distressed physically or financially. If you simply look at premium homes, such as newly built homes or homes in the more expensive neighborhoods of your area, this may prevent you from finding one to fit your budget. But don't let that discourage you because there are ways you can find a home to fit your budget.
Talk to a local real estate broker about searching for a foreclosure home, short sale home, or a HUD home to buy. Your real estate agent will know the negotiation and offer process you need to complete in order to buy one of these lower-priced homes.
For example, a HUD home is a home that has been defaulted on and taken back by HUD and is to be auctioned off. A foreclosed home is one that has been taken back over by the bank that loaned the mortgage, and they will try to sell it to collect back some of their money. A short sale is a similar situation but the home has not been foreclosed on yet: the homeowner is working with the bank to sell it for less than it is worth. Each of these situations can take a bit longer to negotiate and close on a home, but it can be well worth the wait if you can be patient.
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