December 17th – Hispanic Solutions Group
Today we give you important information in the face of a question that generates concern, Hispanic Solutions Group, identified with consumers and users, providing them with timely and accurate information, so that they make important decisions in their financial activities, today it will touch the real estate sector, (mortgage) and tells them that. If you have a steady job but earn less than you would like, you may be concerned that this may affect your ability to buy a home. The good news: There are mortgages and assistance options that can help you become a homeowner, even on a low income.
Can I buy a house with low income?
It’s the question most asked, and the short answer is: Yes, you can buy a home on a low income thanks to mortgage programs designed for low to moderate income borrowers.
“Having a low income can increase your debt-to-income ratio (DTI). This limits some of the loan program options that you may be eligible for, but it doesn’t mean you can’t buy a home at all. “explains Balenda Hetzel, regional production manager for Inlanta Mortgage, which is based in Pewaukee, Wisconsin.
- FHA loan
An FHA loan, which is backed by the Federal Housing Administration, can be obtained for as little as 3.5% down payment if your credit score is 580 or higher. “This loan has less stringent requirements that can help low-income borrowers or those with poor credit histories,” explains Gerwin Wallace, home loan originator at Silverton Mortgage in Anniston, Alabama. You can also pay lower closing costs with this loan. However, if your down payment is less than 10%, FHA loans come with lifetime mortgage insurance (in other words, it can’t be canceled), which can be inconvenient, and the home you want to buy must pass an appraisal. to ensure it meets FHA safety guidelines.
- VA loan
Possibly the most generous type of low-income mortgage is a VA loan, which is available to active duty members, veterans, and surviving spouses. With a VA loan, you don’t have to deposit money or pay for mortgage insurance, your closing costs may be less than what other loans might charge, and you could get a lower interest rate than with other financing options. Also, the VA loan is a lifetime benefit; That means, if you are eligible, you can get a VA loan multiple times. However, you will have to pay a financing fee for this mortgage, the amount of which depends on whether you obtained a VA loan before and how much down payment you are making, if any. This is an additional cost to consider. To qualify for a VA loan, you must have good credit, a stable income, and a VA Certificate of Eligibility, Mazzara says. Also, the amount of your loan should not exceed the appraised value of the home.
- USDA loan
Another generous mortgage program is the USDA loan, which, like the VA loan, requires no down payment. You also don’t have to be a first time buyer to get a USDA loan. However, the home must be located in an eligible rural area, which means you may only qualify if you are buying away from a city or urban location, although many suburban areas are also eligible for USDA financing, according to Wallace. Additionally, your income cannot exceed 115 percent of AMI, and you will also pay for mortgage insurance on this loan, in the form of an initial guarantee fee and then annual fees.
- HFA loan
Not to be confused with an FHA loan, an FHA loan is another type of mortgage for low-income people through Fannie Mae (called HFA Preferred and Freddie Mac (called, HFA Advantage) that requires only a 3 percent down payment. FHA loans are available through state housing finance agencies (HFA), which partner with mortgage lenders to offer affordable loans to low-income borrowers. In many cases, you don’t have to be a first-time buyer to qualify, and you may also receive down payment assistance.
Down payment assistance programs
There are a variety of Down Payment Assistance (DPA) programs and they are generally geared towards low to moderate income borrowers. These programs are usually in the form of a grant (free money) or loan, the latter of which may need to be repaid or you may be eligible for forgiveness after a period of time.
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