Did you know that Bank of America has a low income home loans program? Well they do and if you are one of the thousands of people who are considered low income, this might be just what you’ve been looking for if you want to buy a house. Many low income people have just about given up on their dream of homeownership, but that’s only because they probably don’t know about the Bank of America low income home loans program. Therefore, we are going to breakdown everything that’s involved in this new program and tell you exactly what you have to do if you want to participate. We will also go over some of the pros and cons of owning a home if you are a low income earner, as well as some other helpful tips that will help get you started.
What Is the Bank Of America Low Income Home Loans Program?
Bank of America is determined to rebuild their reputation since they were a major player in the last housing crisis. In fact, in 2014, Bank of America came to a $16 billion settlement with the Justice Department because of their involvement in that housing crisis. Therefore, going forward, they are being extra careful when it comes to vetting their potential borrowers and approving them for a home loan. Bank of America has even stated that they will be going as far as “holding people’s hands” as they go through the process to make sure their potential borrowers don’t eventually default on their home loans. That means these borrowers must have a good track record when it comes to paying their bills. Additionally, Bank of America is insistent that they don’t want to take any chances that any of the mistakes from the past are repeated.
What Are the Qualifications for Obtaining One of the Bank of America Low Income Home Loans?
For anyone who wants to participate in the Bank of America low income loans program, they will have to be able to show proof of income documentation to get their loan, unlike the approval process prior to the housing crisis. The rest of the requirements will depend on which one of the low income loans the buyer decides to apply for. However, some of the requirements could include a minimum credit score, a maximum loan amount and a approvable debt-to-income ratio. Additionally, a low income earner who doesn’t put any money down could also expect to pay a higher interest rate and a higher monthly payment as well.
Does Bank of America Offer Any Other Type of Low Income Loan Options?
Bank of America does offer a zero down program that was designed for low income buyers. It’s called the Neighborhood Advantage Zero Down program and it’s available to those with good credit, but have a low monthly income and not enough upfront money for a down payment and the other various upfront costs.
This program is also geared towards buyers in any income bracket who have considered buying or refinancing a home in a low income neighborhood. However, as we mentioned above, a buyer who doesn’t put any money down, could expect to pay a higher interest rate and a higher monthly payment as well.
For low income areas, the qualifications for this program are that the borrower must have an annual income that’s at least 80 percent below the median income for the metropolitan statistical location where the house is situated; however, there are a few exceptions. Additionally, the borrower is allowed to use the money they received as a gift, grant or installment loan and can also use the money given when a seller offers to pay the closing costs.
Another somewhat limiting factor for this program is that it’s only offered in 23 states and therefore not everyone will be able to participate. However, some mortgage lenders are warning that this type of program might not be for everyone, especially those who have little to no money in savings, haven’t been on their jobs for very long and those who don’t anticipate any significant annual increases in their salary. Additionally, this type of loan could also have hidden costs; therefore, the buyer must be diligent when it comes to thoroughly reading and understanding the fine print contained within. That means you should ask the lender direct questions about anything you don’t understand and specifically ask for a detailed explanation about what each part of the fine print means to you and your specific situation.
What Are the Pros and Cons of Home Ownership if You Are a Low Income Earner?
Just as with anything else, there are pros and cons to becoming a home owner if you are a low income earner.
Pros. Owning a home will allow you to buy a house on credit, which over time will help you build equity, as well as build your credit. You will also enjoy the freedom that comes with homeownership because you won’t be bound by as many rules and regulations that come with renting. Additionally, owning a home will usually improve your quality of life and give you the self-esteem and pride that makes you feel good about yourself.
Cons. One of the major disadvantages of owning a home, especially if you are a low income earner, is having to pay for repairs, maintenance costs and the upkeep on that home. Additionally, when you own a home, you are bound to that location and can’t just move should the need arise. It’s also possible that your home’s value could decrease which would diminish any equity you might have acquired.
However, homeownership is the American dream and one that should be pursued whenever possible. If you find you can’t achieve that dream right now, don’t let that stop you. Make some goals and do whatever it takes to achieve those goals. And you can start by using any and all resources that are available to you. The next thing you know you will be moving into a house of your own and experiencing the realization that your dream of homeownership is now a reality.
Are There Any Other Homebuyer Options for Low Income Earners?
The Federal government, along with many local agencies all have programs in place to help low income earners buy a house. Additionally, HUD also has affordable housing programs to help low income earners as well. Another great place to look for home buyer assistance if you are a low income earner is to check with the non-profit organizations in your area to see what kind of assistance is available to you. There are commonly programs for transitioning out of homelessness, young mothers, victims of domestic violence, the disabled and there’s also a program called the Self-Help Homeownership Opportunity program (SHOP). Additionally, there are also programs called The Homeownership Zones Program and the Choice Neighborhoods program, both of which help low income earners in danger of becoming homeless and both of which are used to help rebuild and revitalize a low income area.
2 Point Highlight
1. Many low income people have just about given up on their dream of homeownership, but that’s only because they probably didn’t know about the Bank of America low income home loans program.
2. The Federal government along with many local agencies all have programs in place to help low income earners buy a house.
