Our landlord informed us in December that he would be selling the house we live in. Our rent runs February to February, so two months was NOT enough time to work things out (our choices were move or buy the house ourselves). We had NOT planned on house buying, have a below market rent, etc. We worked out a deal for one more year (Feb 2026-Feb 2027) with a $100/month increase in rent (which is still below market value for the area). We don't want to buy this house, we already know all the issues. We did not have a downpayment saved, but an aunt passed in late December and provided a 40K inheritance, which is being set aside for house buying.
Here's my struggle. We are considered "moderate" income (about 125K total) so don't appear to qualify for any of the local homebuying programs, which are all geared to low income residents. We have ZERO experience with home buying, but have worked out that we need to come up with $300-500 more per month than our current rent to afford a reasonable house (200K purchase price). We need help with budgeting, understanding mortgage options, making the right combination of down payment/ PMI/ etc. We both have credit scores in the 800s, but that's because we have retirement loans (we consolidated our credit cards in late 2025, right before we learned about this….) that don't show on our credit reports.
Are there homebuying programs/guidance for non-Low income purchasers, and if so, how do I find them???? I'm in Missouri, if that helps.
Hi there! I can't guide you into homebuying programs but I can share some info that I have learned over the years. I too am moderately incomed and the only real program I qualified for when I purchased my first house was an FHA loan ( I believe that is for 3.5% down.) because I was a first time home buyer and I had good credit (somewhere in the 750 range). It was a good loan that got me into my first home, but I also had to pay PMI because I did not have 20% down. I chose to go forward with it because of the timing (2008) I had the opportunity to buy when normally I wouldn't have had the option (there were a lot of homes on the market). The interest rate was good, but not the best. I have bought, sold and saved since then so my most recent home purchase I was able to put 20% down. No PMI and again I bought when interest rates were lower (3.99% for my current 30 year mort, I will be in this house until I die likely). I would highly recommend the latter, as paying PMI sucks. You can try to refinance at some point, but requires paperwork and a home inspection.
Setting up a good budget will help guide you into a good decision. I believe it is recommended that your budget is no more than 30% of home related costs: mortgage, insurance, utilities, home maintenance, home repair, etc. Having a house can be a good investment but it has to be maintained and when you own, there is no landlord to call to fix things. This last year I had to shell out about $2000 from my emergency fund to cover an AC repair (and I live in California where AC is a necessity in the summer), so when you are looking at the cost of buying, be sure to include all of that stuff.
What you need to determine is if it is more cost effective to pay more in rent vs the whole cost of buying a home. I don't know what your rental market is like, but where I am at it is pretty close to what I pay for my mortgage (although my interest rate is much less) and if you factor in what I pay in for home maintenance, property tax, etc. its much cheaper to rent. Renting and putting your inheritance into a HYSA and/or some long term safe investments (Like ETFs: ITOT, VOO, etc.) might be more beneficial to building wealth than investing in a home. It all depends on what your end goal is. If owning a home works in your budget and it is a personal goal of yours, than you can probably make it work. But if you're doing it just to build wealth, there may be better ways to do that. (depending on your time horizons)
All that to say there are a lot of great information sources when it comes to money out there on the internet. I would recommend Ramit Sethi for a financial reference as he presents good information and has a couple walkthroughs of renting vs buying. I believe there should be a couple blog posts in the Saverlife blog about assistance programs and buying your first home. I also think Saverlife has some affiliate links for financial counseling, so if you don't feel comfortable running your numbers, you can work with a CFP (certified financial planner) who can do that for you.
Good luck and I hope it works out for the best!
