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Buying a house is a significant life milestone. But it can also take a toll on your finances. And while a home loan<\/a> is a great way to fund the purchase, financial institutions can reject your application because of your low income. But this doesn\u2019t mean you should give up on your dream of owning a home.<\/p>\n\n\n\n There are multiple government-backed and private home loan options that help individuals with a low income to buy a house. From refinancing mortgages<\/a> to zero down payments, these programs offer multiple benefits. <\/p>\n\n\n\n Here are the 5 housing loan options that you can avail of based on your eligibility \u2013<\/p>\n\n\n\n The FHA loan is a government-backed program that is designed specifically for low-income first-time home buyers. The program has relaxed eligibility criteria for home loan<\/a> that make it easier for you to buy a house. With an FHA loan, you can qualify for a 3.5% down payment with a CIBIL score<\/a> as low as 580. Some financial institutions can also extend an FHA loan if your credit score is above 500 given you make a 10% down payment. <\/p>\n\n\n\n Your FHA loan limit will also depend on the country where you want to buy a house. Additionally, you have to pay the closing costs that can\u2019t be financed. These costs include third-party fees, lender fees, or any other prepaid elements. Mortgage insurance is also mandatory for this loan and you can eliminate it only upon refinancing the mortgage into a conventional one.<\/p>\n\n\n\n Lenders offer a VA loan to veterans, active members, and their families. The loan has several benefits besides low-income eligibility. A VA loan helps you to finance 100% of the purchase amount. This means you do not have to make any down payment. Additionally, you do not require any mortgage insurance or closing costs to avail of this loan and can enjoy low-interest rates for home<\/a>.<\/p>\n\n\n\n The Department of Veterans Affairs guarantees the VA loan, but it is extended by private lending institutions. You\u2019re eligible to get a VA mortgage if you\u2019re an active-duty service member, a veteran, a National Guard member, or a Reserve member and meet the minimum service requirement. In some cases, surviving spouses can also get a VA mortgage. A VA-backed loan enables you to replace your existing loan with a new one using cash-out refinancing.<\/p>\n\n\n\n The Government of India has initiated the Pradhan Mantri Awas Yojana\u2002(PMAY)<\/a> to provide affordable housing<\/a> to citizens with low-income. Under this scheme, you can avail of a home loan for up to 20 years at interest rates starting at 6.5% p.a. The scheme also gives a preference to differently-abled and senior citizens. To avail of the scheme, you cannot own a pukka house anywhere in the country.<\/p>\n\n\n\n The Pradhan Mantri Awas Yojana has two sub-sections based on area-<\/p>\n\n\n\n The Pradhan Mantri Awas Yojana \u2013 Gramin (PMAY-G)<\/p>\n\n\n\n The Pradhan Mantri Awas Yojana \u2013 Urban (PMAY-U)<\/p>\n\n\n\n You can avail of these schemes based on the area where you want to buy a house. To be eligible for this scheme, you must belong to the Economically Weaker Section (EWS<\/a>), Lower Income Group (LIG), or Middle Income Group (MIG).<\/p>\n\n\n\n If you\u2019re planning to buy a house in a rural area, you can avail of the USDA loan. The United States Department of Agriculture (USDA) extends credit to low-income families to buy homes in rural areas. With the USDA home loan, you can finance 100% of the purchase amount. However, you can only buy a house in an eligible rural area. Additionally, to be eligible for the loan, your combined household income should not exceed 115% of the median household income of your area.<\/p>\n\n\n\n The USDA loan requires you to be a US citizen and to occupy the house as your primary residence. To qualify for the program, your credit score should be 640 or more. The loan does not support refinancing mortgages after 20% equity, unlike other home loan options. Therefore, for cash-out refinancing, you must refinance your mortgage into another conventional home loan.<\/p>\n\n\n\n The Rajiv Yojana is another scheme launched by the central government of India to make the country slum-free by providing a civic infrastructure, basic shelter, and social amenities to every citizen. Under the scheme, individuals from the Economically Weaker Section (EWS) or Low Income Group (LIG) can receive financial aid of Rs. 7.5 lakh for houses in the size of 21 to 40 sq. mt.<\/p>\n\n\n\n The eligibility criteria for the scheme are divided into three categories-<\/p>\n\n\n\n Just because you don\u2019t have a high income doesn\u2019t mean you can\u2019t own a home. Choose a loan<\/a> that works for you without burdening your monthly expenses. With these low-income housing loan options, you can\u2019t only fulfil your dream but also enjoy perks like low-interest rates, discounted mortgage insurance, a small or zero down payment, cash-out refinancing and much more.<\/p>\n\n\n\n Also remember, all these programs require you to occupy the home. This means you can\u2019t use the credit to buy a vacation house or rent it to tenants. Another important point to keep in mind is finding a lender and a real estate agent who is reliable and will consider your financial limitations and facilitate refinancing mortgages. So, before taking the plunge, make sure you research well and meet all the eligibility criteria.<\/p>\n\n\n\n\n
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Buy Your Dream Home Without Stretching Your Budget<\/strong><\/h2>\n\n\n\n