There Are Ways You Can Afford To Buy A Home That You Might Not Have Thought Of

If you haven't bought a house before, you might worry that you don't have enough funds or the collateral necessary to buy one. This isn't necessarily the case, especially if you look into alternative ways of finding and buying a property that you might not have thought of. While you will still need a good down payment, here are some ways you could afford that home you always wanted.

FHA Loans

One way you could afford a home is to obtain an FHA loan. The Federal Housing Administration offers good mortgages with less strict requirements than traditional bank loans do. First-time buyers might qualify for an FHA loan if you have a downpayment of at least 3.5% of the house price, and your credit score doesn't have to be as high as for a traditional mortgage either. FHA itself doesn't give loans, but instead insures approved lenders against default so they can offer lower mortgage rates.

Rental Properties

While you might want to live in your home once you buy it, it might be a good idea to rent it out to qualified tenants for a year or two to help cover the cost of the mortgage. You can vet potential tenants through a real estate agent and get references and proof of income before renting to anyone. This can help you pay off a good portion of the mortgage and allows you to save additional money for when you move into the property yourself.

Auction Homes

In the case of foreclosed homes, there is the potential to get a better purchase price by attending an auction or short sale for a home. While a short sale auction means you don't have the opportunity to actually tour the house inside beforehand, you can walk away with a good home at a very good price. You can check the neighborhood first to see if it suits your needs, and see if there is a listing for the home via a real estate agent to see if there are inside pictures and if anything needs fixing and bid accordingly.

Home Ownership Vouchers

If you are a low-income earner and have received assistance in the past for rent, it is possible that you may qualify to receive a home ownership voucher to purchase your own home. It may be possible to receive the voucher even if you have never received any kind of government assistance by applying to your local Public Housing Agency to see if this option is available.   

To learn more, contact a company like RE/MAX EXECUTIVE.