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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.

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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 July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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