What the above blurb doesn't detail is how many of those buildings are still in livable condition. Obviously you need some idea of where to start to find a building where you can live without the fear of the whole place coming down on your head. But not everybody can just fork out some money and land themselves a home.
So, you live on a limited income? Whatever the reason; be it living on a retail wage or struggling with making ends meet on Disability; there are ways to become a homeowner. Now note, this isn't a step by step guidebook to get through to the end boss and win the day, but these are starting points for yourself and your family to get your feet on the right path.
1) Take A Second Look At Your Spending And Save For A Down Payment
Limited Incomes leave you feeling like you don't have a penny to spare. You don't take vacations nor do you own a fancy car. Heck, that old jalopy you drive is held together with chewing gum and baling wire. You may not even have a car; you may ride public transport or ride your bike. However, there may be resources that you are spending on that you may not realize you can cut.
Look at your little purchases. Store bought coffee? No matter how cheap or crappy it is, it's still money out of your pocket. Bring leftovers for lunch (assuming you get one that is). Give up acrylic nails. When you shop for groceries, check the prices of the products you buy and keep an eye open for where you can get them cheaper within a reasonable distance. Keep your eyes open for free checking accounts with a better bank. Some banks bite you in the pocketbook for $5 every month for 'maintenance!' You could find yourself saving a few thousand a year.
Also, many of us get a number of expected or unexpected payments during every given year: tax refunds, birthday (or other gifts), or even selling items you no longer use. Put these in the bank as often as you can.
Chances are high that you will need to take out a mortgage. What is a mortgage? It's basically the biggest debt you can take on in your life: a loan meant to pay for a home. Your home is basically collateral, or an item of value offered as a legal promise to pay back your loan, with interest. It usually lasts between fifteen and thirty years. If you don't pay off your debt, the lender has the right to take your home and sell it to pay off the debt. You usually make payments every month in order to lower your debt.
Lenders usually require a 20% down payment when you buy a house. Federal, state and local agencies can offer assistance to first-time buyers, military veterans and other hopeful homeowners. The Federal Housing Administration, or FHA, can wrangle that percentage down to 3.5% by working with private lenders. If the home you've got your eye on is in a rural area, you might qualify for a no interest loan backed by the U.S. Department of Agriculture. Explore your options with Habitat For Humanity; you just might meet the income limits.
Contact city or county officials for programs. Hit the internet and research government websites for other programs. Combining your down payment with the assistance programs can go a long way. One thing to keep in mind is that the more money you put in a down payment, the lower the interest rate in repaying your loans.
You can find a mortgage company near you simply by plugging in your zipcode.
3) Build Your Credit Score
Your 'credit score' is basically fancy terminology for a three digit number used to predict risk; how likely you are to let payments fall by the wayside after money is loaned to you. They look at your payment history, how much you owe currently on any debts, how long you've been making payments on all your past and present debts and other related information and generate your credit score from this information. The higher your score, the lower the risk; which means that a 'good' credit score is anything between 700 to 850 and bad credit falls between 300 and 699.
In order to raise your credit score, first find out where you stand on your credit score. Then work to raise it by paying your bills on time and reducing your current debts. The higher your score, the better your loans will be and the lower the interest will be in repaying them.
Let's be honest, a lot of people lost their homes in recent years because they couldn't continue to pay for them. No matter the factors involved, it's always a good idea to know whether you can continue to pay off your mortgage. In short, your mortgage payment shouldn't be any more than 28% of your monthly income.
Lenders want your mortgage payment plus other debts (car payments, credit card payments etc) to be at or below 36% of your income. Google some online calculators to help you decide what you can afford.
Homes are also expensive to maintain; a little bit of damage can cost you dearly if it goes unchecked. And if you're buying a home with the damage included, you may have to get another loan in order to fix it. You can talk to your mortgage company about a 203k Loan. These are loans that will help you buy your home and help you take care of the cost of repairs at the same time.
5) Aim for Below-Market or Foreclosed Homes
Below Market Homes are homes that are sold below the average market price; they are meant to help low or moderate income buyers to buy their first home.
Believe it or not, developers must sell or rent fifteen percent of their homes, apartments and other living units below the market rate. Buyer's assistance programs have access to the locations and prices of these places. You can also contact local government's housing and community development departments for these lists.
A foreclosed home is a home that the previous owner could not pay for, and the bank took it away. It takes more work to get one, but these homes are already partially paid for. By the time that these homes go on the market, the bank just wants to sell it to make up for the money it is still owed.
These homes cost less than a similar house without a foreclosure attached, but they are also sold 'as is.' In short, what you see is what you get; damages to the home included. Talk to your mortgage company about a Homepath loan; these are loans meant to help pay for a foreclosed home's down payment and to handle repairs you need to make the house livable.
Remember, it's not impossible to become a homeowner; you just need to know the right paths to take!