Buying a house usually requires a mortgage and to qualify, you need to demonstrate favorable credit and enough income to pay for the home loan. If your income is not high enough to satisfy lenders, you'll need to compensate for your low wages. You can make up for any deficiencies in your income with a larger down payment, a co-borrower or other resources that prove to a lender that you are an acceptable credit risk.
Shop for affordable homes. Look at your budget to determine how much you can spend on housing with your present income. Talk to a real estate agent and loan officer about your income and only consider houses that come with a price tag you can afford. If you're a teacher, firefighter, law enforcement officer or emergency medical technician, you may qualify for U.S. Department of Housing and Urban Development's Good Neighbor Next Door program, which allows you to buy a HUD foreclosure at a reduced price.
Explore government-insured home loans. Lenders provide mortgages insured by the Federal Housing Administration, the Veteran's Administration and the U.S. Department of Agriculture to first-time homebuyers and those with income challenges. Such loans allow lenders to take into account low wages and limited cash flow when processing your loan application.
Research state and local housing programs in your area. Initiatives such as the Economic Opportunity Mortgage provide loans to people buying homes in specific census areas. Applicants are required to have incomes at least 120 percent below the median to qualify.
Save a large down payment. Putting down the traditional 20 percent required by a conventional mortgage makes your monthly mortgage payments smaller. You'll also avoid paying for mortgage insurance, and you may qualify for a lower interest rate. A cheaper mortgage is ideal for consumers with low income.
Apply with a co-borrower. Whether it's a spouse, a parent or an adult child, applying for a mortgage with someone else who has a higher income increases your chances of getting a house.
Pay your bills on time and pay down large balances to improve your credit rating. Having a lower income means that all other parts of your mortgage application must be perfect. Maintain a high credit score by ensuring that you have little consumer debt.
- Work with a mortgage broker. A professional broker can review many different loan options and recommend a mortgage for your income level.
- Consider renting to own. If your income has the potential to rise in a year or two, rent a home from someone willing to sell it to you once you are able to qualify for a mortgage.