What It Takes to Buy a House Scripps Howard News Service
A single mother living in public housing with her child, her brother and two nephews sent me an e-mail asking how she could buy a house.
There is no secret way to buy a house. The foremost requirement is having enough money to make monthly mortgage payments. If you can't pay the mortgage on a regular basis, it's not the right time to buy.
The second requirement is having enough income to pay property taxes and homeowner's insurance. If you can't make those payments, you will lose the house.
The third requirement is being able to maintain the property. You get a lot of leeway here, but some repairs must be made or the house will lose its value.
You also need to have a decent credit record. If you have lots of late payments or have declared bankruptcy or reneged on earlier debts, it's harder to get a mortgage. And if you do get one, you'll pay a much higher interest rate.
What's much less important these days is money for a down payment. While it's still preferable to make a substantial down payment--to avoid private mortgage insurance and higher monthly payments--you now can buy a house for almost nothing down.
Conventional lenders all over the country have programs that require a down payment of just 3 percent. You can put down even less--sometimes nothing--but at a higher interest rate.
If you are a low-income or a first-time buyer, you may find local programs that will offer help. In most major cities, real estate companies hold home-buyer education classes and so do a number of nonprofit groups. Attend some of these sessions even if you have no current plans to buy. The information can lead you to other sources of help. Look for ads in the local newspaper or call real estate agencies and see what's available.
Another source of information is government agencies. Look in the blue pages of the white-pages phone book for county or state housing and ask if there are any programs available to aid low-income homebuyers.
Finally, try the Internet. Start at the search engine Google , and type in "low-income homebuyers." You'll get a lot of hits and maybe information you can use. Or go to www.nehemiahloan.com and see if that program is right for you.
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