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Ten Brilliant Ways to Become A Homeowner When You’re Broke

Ten Brilliant Ways to Become A Homeowner When You’re Broke

If you feel stuck in an apartment or a rental house because all your money is going to rent. The good news is that there are awesome programs out there that let you break the chains holding you down as “tenant” and allows you exchange that title for “homeowner”.

Purchase Your Dream House With a USDA Loan

First introduced in 2014, this loans purpose is to “improve the economy and quality of life in rural America” They allow you to borrow the entire purchase price with no money down and USDA loan are not just for areas filled with fields and green pastures. They are available in smaller towns with traditional neighborhoods throughout the United States.

To find out more about where these loans are available in your area, visit the USDA government website. You will find information regarding approved areas based on your city and state. You can also find out specific income eligibility for your area.

An FHA Loan Requires Little Down and Protects You From Buying a Money Pit

Although FHA Loans require an affordable down payment (usually 3.5 to 5 percent down) they do not have area restrictions like the USDA Loan. As long as the house is in good condition, there is a good chance it will qualify for an FHA loan.

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One advantage of an FHA home loan is the FHA inspection. It is more comprehensive than the normal house inspection and can point out defects that must be fixed prior to the loan closing. The thorough inspection can help you avoid buying a money pit.

The VA Loan is Not Just For The Active Military

VA Loans require no money down. You are able to negotiate closing costs by asking the seller to assist by paying these costs for you. This means that you can become a homeowner with virtually no money.

To qualify you must meet certain income and employment guidelines. You also must meet the requirements for military service or be the spouse of someone that qualifies. Talk to a VA-approved lender for more information.

Consider a Loan Assumption

Some loans, such as VA and FHA loans are assumable. Although assuming a loan has not been a popular option for several years, they will gain in popularity in the future. Why? Because right now no one needs to assume a loan due to the low-interest rates. But as interest rates rise in the future, assuming a loan at a 3.5% interest rate when current rates are 6% will be very appealing.

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The downside with this type of mortgage, is that it may require a larger amount to be financed if the seller has a significant amount of equity in the home. Still, they are worth keeping on your radar.

Purchasing the House You Rent (Lease to Own or Land Contract)

If you are renting a house and want to buy it you may want to talk to the owner about a Lease to Own or Land Contract. This type of purchase is perfect for anyone that wants to purchase a house, but doesn’t quite have the downpayment needed, or is in the process of rebuilding credit (such as after a divorce or bankruptcy).

Typically, a Lease to Own requires a small down payment and an agreement regarding how much of the rent payment will go, towards purchasing the home.  You and your landlord will also agree upon how long the rent to own period will last. After that time expires, you apply for a mortgage to complete the purchase. This allows you to apply for a mortgage, when you have more chance of approval, after rebuilding your credit.

A Navy Federal Loan is Not a VA Loan

The Navy Federal Credit Union is similar to the VA Loan, but the funding fee is less than VA funding fees. Typically, all military funding fees can be financed so this is also a 100% financed loan that requires no money down.

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The Navy loan is only available to members of the Navy Federal Credit Union. Admittance to this credit union is more strict than a normal credit union and the most common members are military personnel. However, this membership is extended to some family members of military personnel, some civilian employees of the military and employees in the U.S. Department of Defense.

Mortgage Insurance Makes Up for Missing Downpayment Funds

If you are willing to pay Private Mortgage Insurance (PMI), many mortgage brokers work with lenders, that will allow you to put down 10 percent instead of the traditional 20 percent. These loans have advantages and disadvantages.

An advantage is less money down and the ability to drop the PMI once you own 20 percent of your home. The disadvantage is the additional payment that is tacked on to your normal mortgage payment. This amount can be as much as 10 percent of the mortgage payment.

Private Mortgages.

If you know someone that is willing to back you on your home purchase, they can purchase the home on your behalf and then become your lender. This scenario can be a win-win. You get that home you had your eye on and they get paid interest on the amount they let you borrow. You can also avoid PMI when going this route.

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Many first time home buyers, find this type of assistance with parents and grandparents who have the funds to pay cash for the home.

If It’s Your First Home You Are in Luck With First-Time Home Buyer Programs

There are many first time home buyer programs out there. A simple internet search will return a plethora of programs. There are local programs, state programs and federal programs. There are also programs offered by individual banks and mortgage companies.

These programs vary in the amount of assistance they offer. For more information on first time home buyer programs in your area contact a local mortgage broker.

Credit Union Financing is Available to Most

If your local bank says no to a mortgage don’t take that as a final answer. Many credit unions have less stringent guidelines for qualification on a home loan. Credit Unions also often offer home loans with as little as five to ten percent down.

Before giving up, check with your local credit unions for program specifics and eligibility requirements for their home loans. Many credit unions only require a deposit account for membership in their credit union.

To find out more about these programs and other ones that could be an option for you, contact a local mortgage broker. You may be closer to owning a home than you think.

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Missy Yost

Missy is a business owner and writes about everyday lifestyle tips on Lifehack.

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Last Updated on January 21, 2020

How to Develop a Millionaire Mindset in 6 Simple Steps

How to Develop a Millionaire Mindset in 6 Simple Steps

We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

How do you go about developing that millionaire mindset? By following these simple steps:

1. Focus On What You Want – And Take It!

So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

Millionaires play to win, not to avoid defeat.

This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

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2. Become Goal-Orientated

It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

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If you are to become a millionaire, you need to start accumulating money.

Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

3. Don’t Spend Your Money – Invest It

The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

Stop working for your money and make your money work for you.

Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

There’s not just the stock market — there’s also property, and your own education.

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4. Never Stop Learning

The best thing you can invest in is yourself.

Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

Learn everything you can about how economics works, how the stocks markets work, how they trend.

Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

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5. Think Big

While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

Aim for the stars, if you fail you’ll still be over the moon.

6. Enjoy the Attention

To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

More About Thinking Smart

Featured photo credit: Austin Distel via unsplash.com

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