Elena Price

Westwood MA Real Estate Agent

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Making Homeownership Work on a Budget

December 15, 2016 By Elena Price

116 Farm Road, Sherborn MA - For Sale
116 Farm Road, Sherborn MA – For Sale

For low-income families, buying a home can seem out of reach. On top of financial stress, the competitive market may make buyers feel like they will never find a home they can afford. If you dream of buying a house but have lost hope because you don’t think you can afford it, don’t give up. There are several things you can do to help make your dream of buying a home into a reality.

Search in More Affordable Neighborhoods

When trying to buy a house in a competitive market, you might see high-end houses snapped up in minutes. In order to avoid bidding wars and having to either walk away or agree to a price way outside your budget, consider looking at areas with less interest. This includes neighborhoods you may have written off – you may find a hidden gem in an area you originally ignored.

Consider neighborhoods farther away from downtown, which often have lower house values. You could get more bang for your buck in terms of home size and outdoor space in these areas. Some neighborhoods on public transit lines may end up being quicker commutes than areas closer to downtown metros.

Save for Amenities

If switching neighborhoods isn’t an option, scale back on your must-have list. A great home doesn’t have to come with all the bells and whistles and you can save up to make gradual improvements after you purchase your home. Several aspects of residential properties can increase the value of a home:

  • Large yard
  • Landscaping
  • Brand-new appliances
  • Finished basement
  • Renovated kitchen and bathroom

Houses without these characteristics are often less expensive and a good place to start when looking for affordable homes.

FHA Loans

FHA loans are mortgages approved by the Federal Housing Administration (FHA). Borrowers only need 3.5 percent of the total price for a down payment and a minimum credit score of 580. These kinds of loans are helpful if you can’t afford to save tens of thousands of dollars for a down payment. Even if you have recently gone through a bankruptcy, you might still qualify for an FHA loan.

There are a few downsides to an FHA loan. You will be required to foot two types of mortgage insurance premiums: one upfront premium that’s built into the mortgage payment, and an annual premium that you break down into monthly payments. The house you want to buy must also meet Minimum Property Standards and pass an inspection from an FHA-approved appraiser.

Additionally, you must meet a number of other requirements to qualify for an FHA loan.

Reduce Utility Expenses

Owning a home comes with additional costs you should consider, especially if you’re moving to a house from a rental apartment. Not only do you need to pay a mortgage and save for a down payment, you’ll also have higher utility bills, and any repair bills fall on you. Maintaining the day-to-day aspects of a house can be expensive, but there are ways to cut these costs.

Several states and utility companies have programs to help low-income residents pay for services. These programs include energy assistance, utility assistance, housing initiatives, and more. Other options such as Access from AT&T provide low income households with internet service for as low as $5 a month. Some states even provide cell phones for low-income residents.

Be sure to do research on what programs are available for low income families at both the state and federal level – most states have numerous forms of income-qualified assistance programs.

Other Government Assistance Programs

There are dozens of programs available to assist low-income families with dreams of buying a home in the near future. Some programs are available through the U.S. Department of Housing and Urban Development (HUD), while others are funded through different government branches.

Difficult finances shouldn’t keep you from living in a home suitable to your family’s needs. There are dozens of options available for individuals from all backgrounds. If you would like to reach your dream of owning a home, investigate your options and find what works for you.

Article: Coldwell Banker Insider Tips

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Filed Under: Active Listings, Coldwell Banker Realty, Home Buyers, Home Buying Resources, Market Insider Tips, News & Updates, Sherborn MA

About Elena

Photograph of Elena PriceTop 1% Nationwide, #4 company wide, #1 Selling broker in Westwood by volume and over $1 billion in real estate sales! ... Learn more about Elena >

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About CBR

Logo for Coldwell Banker RealtyColdwell Banker Realty is New England's most comprehensive real estate services organization, and a division of NRT, the nation's leading residential real estate brokerage company. NRT, which is a division of Realogy Corporation, has approximately 750 offices staffed with 45,000 sales associates in 35 of the country's largest metropolitan markets. Elena works out of the Westwood office, located at 692 High Street - Westwood, MA 02090.

Elena always answered our emails/calls right away. She was very helpful and very personable.

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