If you are a single mom and are looking to own your own home or are trying to refinance a mortgage you will want to read this article. There is an epidemic of foreclosures and lenders are being extremely cautious these days. Finding mortgage loans and refinancing options has gotten harder but they are out there. It will take a bit of searching to find the right lender and interest rate for you.
You are not alone. With the wars raging in Iraq and Afghanistan there will be a lot more single mothers joining your ranks. The government statistics has declared that just fewer than 35% of all the homes in America are headed by a single parent. 40% of that number are single moms. Not all of these households fall under the poverty levels, but raising a family these days have gotten to be more expensive than just tens years prior.
Having a medium income job does not mean that you are not having financial difficulties. Facing the facts of life in America we see cost of living increasing while wages are staying g the same. We are expected to pay the increase in rent/mortgage, electrical, food and sundries with the same pay were receiving five to ten years ago. This has made an income, that once settled you into the lower middle class economically, seem like living in abject poverty. There are programs that are government backed mortgages designed to help single mothers get their piece of the “American Dream”.
Home Buying Assistance for single mothers
You need help and whether it is from the federal government or donations from charities you will be one step closer to reaching the goal of home ownership.
You may have heard of the Department of Housing and Urban Development, but did you know that you could get assistance from them when searching for a home mortgage lender. Single mothers that would not otherwise qualify for a home loan through more conventional means and apply for the Federal Housing Assistance Program at the local HUD office. Once approved for this you will likely find it easier to get a more conventional home mortgage loan. This is a government guarantee to the potential lender that should you default on the loan they will ensure that the lender get their payment. HUD also oversees the HOME program this is a block grant that states and communities receive each year to be allocated to agencies to help improve the housing of low-income residents. Though you have to meet the programs criteria as a single mom you should check all avenues at least find out if you can qualify by going to the HUD website to read the qualifications check list. Another great program overseen by HUD is the Housing Choice Vouchers Program. The programs vary from state to state call your local Community Connections or HUD office to see what you need to do to apply.
A final note on this subject is that every state generally have some type of programs for first time buyers, some are even ran by the counties and cities. Call you local agencies to find out what programs are offered in your area. The problem with these is that are not widely known about and the funds just sit there gaining interest. These are not advertised but if you ask the right questions you will get in on the fast track to getting some valuable financial assistance.
Benefits of Government Backed Loans
Getting a mortgage loan becomes a lot easier if you are pre-approved for government backing. It is almost like the federal government is co-signing the loan for you. They are in essence saying to the lender that if this person fails to pay we will.
The loans offered to those who have received this approval has lower interest rates and the qualifications aren’t as stringent as the ones for regular lending.
Getting a government loan doesn’t involve you getting money directly from the government but is the process of getting the government to agree to sign for you, the government becomes the collateral for the loan. When you receive this loan, you know that if you fail to pay it the money for the loan comes from the taxes paid by the citizens of the country.
Your friends and neighbors are the real co-signers and the losers if the loan goes in default. Defaulting hurts you and everyone else because the property taxes and federal taxes increase to cover the payouts for these defaulted loans. The banks get paid and they know that they will so it is infinitely easier to lend to a sure bet than a risk.
There are three types of loans you can get with government approval: FHA loans, VA Loans, RD Home loans.
One is the popular loan offered by the Federal Housing Administration . They are a part of the Department of Housing and Urban Development and this loan backing is handled through their offices.
This loan is generally given out at 3.5% interest people who meet the income criteria at just above poverty can get this loan. The FHA will give this loan to people with less than perfect credit scores. You can be close to the borderline with your credit score and still be qualified. The one stipulation with this loan is that you as of the loan. Visit http://portal.hud.gov/portal/page/portal/HUD, for more complete information.
Veterans can get loans through the Veterans Administration offices. The office of Veterans Affairs guarantees these loans. These are available to those people who have served their country. It doesn’t matter is it was wartime or peacetime you still are eligible for the loan. Veteran’s loans do not require that you have a down payment. The criteria for this loan includes a few other aspects other than military service but you definitely will not qualify without it. Visit http://www.benefits.va.gov/homeloans/, for more complete information.
The United States Department of Agriculture also has a program the back loans for homes in rural/farming areas. The “RD” loan program helps those who have the income to pay a mortgage but is 115% less than what the government considered the standard income or “median Income” for that area. For more information on this loan visit www.rurdev.usda.gov,
Widows of Iraq and Afghanistan — A Government Home Loan JUST for Widows/Single Mothers
With the war on terror continuing to be waged, more women are finding themselves joining the ranks of single motherhood. New widows are being made on a daily basis. Once the husband is gone they are left to carry on, without knowing how they will provide a home for their families. Widows of the deceased and those listed, as Prisoners of War are eligible for certain benefits.
The VA offers quite a few benefits and services for surviving spouses, their children and even dependant parents of fallen soldiers and other service members. If your spouse died while on active duty you can visit the following website for more information on the types of services that are available to you http://www.militaryhomefront.dod.mil/. This is “Military Homefront” a website that has up to date information on all things offered to families of personnel serving or who have died for this country.
Another website that has information on benefits for surviving family of military persons is at http://www.militaryonesource.com/home.aspx?MRole=&Branch=&Component, this will help you find out about the taxing process and other valuable information that you will need to complete the financial healing process.
The military has put together a comprehensive guide that covers everything from bringing your loved one home to getting the benefits that are due to you and your family. Now that you are a single mom you need all the help you can get visit here. If this link fails to route you to the PDF visit http://www.militaryhomefront.dod.mil/, and type in “taking care of our own” in the search box at the top of the page on the right hand side.
As long as the widow has not remarried or the person has been declared “ missing in action” for more than 90 days you can qualify for these benefits. You must obtain an eligibility certificate from the VA and of do this. You can find the application for this at the official government VA home loan website. Once you have this certification you can talk to a lender.
Though you are usually deemed eligible for your benefits, it helps to know exactly what to expect. There are certain guidelines and rules that are required by the government. Paperwork and proofs are also necessary to get your VA mortgage loan. One is that the veteran has to have been dishonorably discharged but even that has an exception. If your loved one was dishonorably discharged you should still apply for the benefits since his circumstances may fall into the exception category.
Refinancing mortgage loans
The Obama administration has set aside funds to help refinance existing mortgages. Homeowners have been feeling the crunch of the downward spiral. The Homeowner Affordability and Stability/Making Homes Affordable Plan. These new plans and laws make it easier to refinance mortgages with lowered interest rates. These may be the best and only options for some homeowners. Government backed refinancing is great for those who find themselves with credit scores below the 700 mark and with less than 20% equity in their homes. If you have equity left in your home you can refinance often up to 105% of the value of the home. There is also a new item called reverse mortgage that allows people over the age of 62 and that have a large amount of equity to remain in their homes for the rest of their lives and in some cases receive some income on that equity.
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