If you\’ve been renting for a long time, you may have fallen into the false notion you can never buy a home. But before you throw in the towel, take some time to evaluate your rent expenses versus a home loan payment after all tax deductions. After thoroughly evaluating both alternatives, you still feel a mortgage loan is beyond the reach of your monthly income, don\’t give up complete hope. You have many other creative alternatives to help you conquer a devastating loan payment.
One way to qualify for a property in an upscale neighborhood is to search for potential roommates who will rent from you. With the right situation, the income received from your roommates could reduce up to half of your monthly loan payment and utilities. After taking into consideration all tax deductions and profit from equity, you have a good opportunity to make a profit. When the loan is paid in full, you benefit by owning real estate free and clear of any lien or encumbrance. Renters from all circumstances, single or married, have taken strategic steps and opportunities to make their dream of home ownership a reality. Let\’s explore some other avenues:
1) Building a guest unit by converting a garage, then, or attic.
2) Reduce your monthly loan payment by switching to a low adjustable rate loan. In light of the recent melt down in the mortgage business, you should consult with an experienced mortgage agent or real estate lawyer prior to locking yourself into this type of loan.
3) Lower your monthly loan payments with a graduated payment mortgage.
4) Use a balloon mortgage to lower your payments.
5) Consider purchasing a duplex, triplex, or some other income producing home to help you cover the cost of the mortgage.
6) Inquire with a local mortgage agent to see if a mortgage credit certificate program (MCC) exists in your area. Under this program, the government offers you mortgage aid up to $2000 each year.
7) Consider the option of obtaining a part time job to increase your monthly income. This will alleviate any financial pressures to make your monthly mortgage payment, especially if your existing income barely covers your monthly expenses.
Talk to your employer about increasing your salary or offering you housing assistance.
9) Look into the alternative of buying a property together with a family member or friend in the same financial circumstances.
10) Speak to a mortgage agent about the alternative of an interest rate buy down.
11) Explore the alternative of taking over a seller\’s existing low interest FHA or VA loan.
12) Take over a low-equity rate buy down.
By using the above options, you can slash your monthly loan obligations and increase your cash flow. But if you are serious about increasing your ability to purchase a better house, practice good money management and budget your monthly income and expenditures.
One exercise to help you prioritize your budget is to write down all your regular monthly expenses to see where you spend the majority of your income. Although most renters long to own a property, they expend the majority of their monthly income towards non-appreciating costs such as the latest automobiles, hi-definition TV\’s, and concerts. By simply spending time re-evaluating your monthly budget and cutting out unnecessary expenses, you\’ll increase the odds of buying a house sooner.