How to Buy a House With a $20,000 Salary

The Basics: 

Cincinnati OhioThe collapse of the housing market in 2008 has had a devastating impact on individual families and the economy as a whole. Outside of the wave of foreclosures there has also been a significant decrease in property value which has sapped the wealth of millions of homeowners. The other side of that coin however has been the resulting low home prices and historically low interest rates that are the direct result of the bubble.

If you are looking to buy a home 2012 may be an excellent time to buy as there are several cities across the country where you can buy a home for less than $150,000 with an extremely low interest rate. The combination of low interest rates and low home prices mean that many people can afford to buy a home even with a salary as low as $20,000 a year.

At less than 4 percent, interest rates are lower than they have been in 20 years.  In many cities there is a still a large oversupply of homes on the market.  To cap it off, high vacancies as a result of foreclosures are keeping prices depressed and making many homeowners and  banks desperate to get rid of homes that are sitting empty and costing owners money.

These conditions have created the scenario in several cities where a home can be purchased with basically a minimum wage salary and a good credit score.  Below are 10 cities with the lowest median home price.  If you live in one of these areas now may be your time to buy.  If you're looking to start a career or start a family these might be some places to consider moving to.

 Orlando Florida

Orlando, Florida has a median home price of $136,100 requiring a salary of $20,048 

10 Places To Buy a Home With $25,000 Salary or Less

(source HSH.com via MSN.com)

City Median Home Price Interest Rate Minimum Income Needed
Cleveland, OH $103,900 3.9% $15,176
Atlanta, GA $103,200 3.97% $15,202
St. Louis, MO $134,700 3.87% $19,603
Cincinnati, OH $135,400 3.99% $19,994
Orlando, Fla $136,100 3.97% $20,048
Tampa, Fla $144,300 4.02% $21,385
Phoenix, AZ $148,800 3.91% $21,702
Dallas, TX $163,000 3.9% $23,808
San Antonio, TX $162,800 4.07% $24,273
Houston, TX $168,300 4% $24,882
What you may not know: 

Buying a home with a low interest rate may be cheaper than paying rent.  Before you go rent an apartment check out a mortgage calculator to see if you can buy for less.

By paying an extra $50/month to apply against the principal amount of your loan each month you will save $24,000 from the $115,000 in interest you would pay for each $100,000 you borrow (at 6 percent interest).

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