Resolve Debt

In today’s economy it seems like just about everyone is running low on cash. Now imagine that your income is very low to begin with, this would make living in these times even more challenging. Well, for millions of Americans this is exactly the situation they face. Housing is one of the biggest components of the American dream. Owning a home gives the owner a sense of pride and self worth. For this reason, most states have housing agencies that provide programs for low income home loans. Some states even have down payment assistance grants that help prospective homeowners cover the high cost of a down payment.

Now the first step to getting a low income home loan is to find a reputable lender. Unfortunately, there are a number of lenders that will not, or prefer not to, work with low income persons. When you start your search for a mortgage lender you must find one that wants to work with a person with low income. A great lender that I would recommend is ING DIRECT Orange Mortgage. ING is well known for having excellent mortgage rates. They also have an easy online application and they are open to working with low income borrowers. ING has not been hurt very badly, unlike other companies, but the subprime mortgage crisis and are still approving almost all applications.

Something else that is important to consider when looking for home loans for low income earners is that you should get pre-qualified for a mortgage before you make an offer on a home. Getting pre-qualified has two advantages:  the first is that you will know how much you can afford to pay for your home and the second is that you will gain leverage in the process of negotiation when it comes to agreeing on a price for the home. The seller will also know that you are a serious buyer and therefore the closing of the house will occur in a much timelier manner. Sellers will often times reduce the price of the home if they are able to sell more quickly.

Home loans for low income families should only be considered if that family has a very low income. A very low income is defined as being below 50% of the area median income (AMI). A low income is in between 50 and 80% of AMI and a moderate income is a household that has an income below 115% of AMI. In some cases, a family must be without suitable housing and also be able to afford the hosing payments, interest, and insurance.