In a world where two incomes are preferable to one as far as banks are concerned, we’re happy to tell you that it’s not impossible to buy a home on a single income. Based on recent research, 19% of most recent buyers were single females, and 9% were males. Therefore, becoming a single homeowner isn’t out of reach as it once was. Of course, there are specific challenges only solo buyers will face, but who isn’t these days?
Numerous homeowners want to sell their Seattle homes asap. So, stay tuned to find out what to expect and which steps to follow to increase your chances of buying a house solo.
Buy a home on a single income: The steps
If you’ve unexpectedly decided to move to Seattle and consider buying a home here, you’re not alone. The housing market is pretty busy these days. However, even though you wish to become a single homeowner, it’s good to remember that help is always welcome. Whereas single-income home buying is highly attainable, moving alone shouldn’t be. Numerous things can go wrong and turn out to be dangerous and expensive. It’s better to leave the moving part to professionals once you become a proud single owner of your dream home in Seattle.
So, to help you get to this point, let’s see what action is necessary to get your hands on a new home alone.
- Pay attention to your credit.
- Save for your down payment.
- Make sure you tackle your debts.
- Get mortgage pre-approval.
- Look into different loan programs.
- Lean on experts.
- Consider the possibility of a co-signer.
Build your credit to buy a home on a single income
Your credit needs to be in perfect shape if you wish to buy a house solo. The lenders will look solely into your income, finances, and credit history. Therefore, it’s needless to say. It would be best if you sorted your credit before moving on to further steps.
Most typical loans require a credit score of at least 620. So, before actually applying for any loans, check your credit score for any mistakes or negative marks that could affect your loan application. However, it’s worth mentioning that you should aim for the optimal score of 740.
You can order your credit score online at annualcreditreport.com.
Down payment savings
When it comes to the down payment, the standard the bigger, the better it applies. If you are near the golden 20% deposit sum, you’re on a great track to becoming a single homeowner.
Once you get closer to this percentage, the chances of getting approved will significantly rise. Additionally, your monthly payments and interest costs will be lower.
Pay off your debts
By having some significant debts off the slate, you’ll be able to demonstrate to your lender that you can make payments. Lenders prefer when a person has a low debt-to-income (or DTI) ratio. The DTI is a ratio that measures how much your monthly income goes toward your debt obligations.
Usually, the majority of lenders follow the 28/36 rule. This rule implies that your maximum housing expenses shouldn’t exceed 28% of your gross income. Similarly, your total debt shouldn’t exceed 36% of your total income.
Get pre-approved
Before looking or even finding your dream home, we recommend getting pre-approved for a mortgage. Once you get pre-approved, you’ll know exactly how much you can borrow. This way, you will know which price range to choose when you start house hunting.
Furthermore, being pre-approved might help the seller with different offers choose yours faster, as you immediately bring something to the table. So, getting pre-approved before you start looking for your dream home will bring you a couple of steps closer to hiring moving professionals, as Helix Transfer & Storage experts recommend, to help you move to your dream house.
Search for different government loan programs
However, saving for the down payment isn’t a possibility for everyone. The odds might be even less in your favor if you wish to buy a home on a single income. If this is the case, you can consider a loan issued by the government.
The good news is that different available options accept lower down payments. Some of the most popular choices are:
- FHA
- USDA, and
- VA loan program.
The Federal Housing Administration offers a chance for loan borrowers to get a home with a down payment as low as 3,5%. On the other hand, the United States Department of Agriculture offers a 0% down payment for eligible candidates looking for homes in rural areas. Finally, a loan program called Veteran Affairs enables qualified homebuyers to get a home with no money put down.
Put your trust in experts in the field
Being the sole owner of your dream home can sound like a dream. However, getting to that point is better done with professionals on your side. Hiring a local real estate agent will help you find the right home faster and make the deal successful.
Consider a co-signer
The final step is for those with a trusted friend or family member with a good credit score. You could ask them to co-sign your loan if this is the case. That means they will guarantee you will be able to pay out the debt and, of course, is legally responsible for repaying it if you can’t.
Final thoughts on how to buy a home on a single income
The numerous options make buying a house alone more achievable than ever. We hope our guide on how to buy a home on a single income gave you clear insights into what’s waiting for you once you start the process. Good luck!