Home Loans for Low Income Seniors

In today’s economy, there are many senior citizens whose income is considered low. These individuals may need housing loans or refinancing but aren’t sure how they can accomplish this with the amount of money they have. The good news is that there are home loans for low income seniors, available from a variety of different lenders. One source to consider is the U.S. government. They have loan programs for families wanting to purchase land in rural areas and other areas as well. A good first place for senior citizens to start is the Housing and Redevelopment Authority.

There are government backed loans from the FHA, USDA and institutions like Sallie Mae that can help seniors get the loans they need for residential housing and even farming purposes. The first step is to define what kind of loan is needed and for what purpose. For a farm loan where agriculture will take place a USDA loan is recommended as these are meant for low income individuals and families. FHA and Sallie Mae loans can be used for other areas not considered rural and are also geared towards those with moderate to low incomes.

In many cases, senior citizens who have low income may actually have good credit because they have had many years to establish a credit rating. So, the likelihood of approval is higher even if the income is low. Home loans for low income seniors who are already homeowners would actually be classified as home equity loans, mortgage refinancing or a reverse mortgage. These options can help those who don’t want to sell their home but are having trouble making ends meet. Let’s take a look at these options, which are similar but have their differences as well.

When refinancing a home, you are basically trading in your original mortgage for a new one. There are a variety of reasons to refinance. If the housing market rates have dropped, it may be a good time to consider refinancing to get a lower rate and thus lower payments. If your credit has gone up, you may also be able to secure a lower rate than you had previously. There are two different types of mortgages, fixed and adjustable rate. Many people who have an adjustable rate mortgage may decide to switch to a fixed rate mortgage to avoid fluctuations in their payment amounts, especially if fixed rates are low. Refinancing can also change the term of your loan, making it longer or shorter based on your needs. A longer term will lower your monthly payments and may remove some of the financial burden.

A home equity loan can provide a lump sum of money for any purpose, such as a college education for a grandchild, home renovations or even the repayment of debt. Equity is the amount you have paid on your mortgage subtracted from the original mortgage amount. Some who are looking for home loans for low income seniors decide on a reverse mortgage. Rather than getting a large sum of money at once, multiple payments are sent and may span the rest of one’s life. Payments may be sent on a monthly basis or other time frame.

There are plenty of options when it comes to home loans for low income seniors. As previously mentioned, the government can be of assistance but in some cases banks, credit unions and mortgage lenders may be able to help also. A good first step is to learn as much as you can on the subject and speak with a financial and/or mortgage advisor if possible.