If you’re like many people, becoming a homeowner is practically a rite of passage for getting married or starting a family. But what if you’re single and don’t have children? Well, buying a home is an equally significant milestone. That’s because, in all likelihood, it’s still the biggest financial investment you will ever make. Whether you’re single or married with five children, getting the keys to a home is special. And a truly defining moment in your life. Up next, let’s look at how to buy a house as a single person. Specifically, we’ll unlock five important things that singles should do before making a home purchase.
1) Make your credit a priority
If you’re married or live with your significant other, you’ll likely be the borrower or co-borrower on your home loan. However, if you’re single and planning a home purchase, you will be the one borrower a mortgage lender has to consider. So if you’re credit score is marginally low, you won’t have a co-borrower to potentially help leverage it when you seek a loan. It’s therefore critical that you maintain a high credit score. Keep in mind, though, that your credit score doesn’t need to be perfect. You also don’t need to feel like you’re at a purchasing disadvantage as a single person.
A co-borrower actually hurts a borrower’s financial profile if the co-borrower’s credit is dramatically lower than the borrower’s. In a situation like this, the borrower may choose to apply for the loan without a co-borrower, even if the would-be-co-borrower is sharing the residence. The bottom line? As long as you have steady income, a reasonably low debt-to-income ratio (DTI) and a strong credit score, buying a house as a single person won’t work against you. In fact, it could actually help you and simplify the process.
2) Pay off debt
The less debt you have and the more money you make, the better your debt-to-income ratio. And the better your chances of getting home loan approval. As a single person with only one household income, paying off debt might not be the easiest thing in the world. However, the absence of a second income can be offset by having less overhead than someone who is married and has several children, for example. Whether you’re single or not, it’s important to pay off as much debt as possible before you go house hunting, because your DTI factors heavily into whether you will ultimately secure the loan you’re seeking.
3) Get a pre-approval
With the housing market still hot heading into the winter, it’s imperative to be pre-approved for a home loan before you ever make an offer. Pre-approval from a mortgage lender like Fairway of the Carolinas will both make you a more competitive buyer and let you know how much home you can afford so you’re not wasting time shopping for houses outside of your price range. Contact us today so one of our trusted mortgage advisors can get you pre-approved. This is truly the first big step to homeownership as a single person. The same mortgage advisor who handles your pre-approval can also offer valuable tips on how to buy a house as single person. For more on why you should pursue a pre-approval, click here.
4) Plan for both now and later
As a single person, it might be tempting to focus only on the here and now when you’re house hunting. This is fine if you know beyond a shadow of a doubt you’ll be single forever. But what if your status changes? What if there’s a chance that a year from now you’ll be married or even have a child? Obviously, you’re probably going to want a bigger home being married versus single. And if you have a child, well, that changes everything! So just make sure not to buy a house based totally on your present situation, unless you’re 100 percent positive it’s not going to change anytime soon. Instead, plan for both now and later with your home purchase.
5) Let a friend or family member weigh in
Everyone needs at least one person they can count on for honest feedback during the homebuying process. This is especially important if you’re single because you won’t have a co-borrower to bounce ideas off of. So, find a trusted friend or two who will let you know if they can see you living in the houses you’re considering. Ask them them what they think of the neighborhoods and if there’s anything you should consider that you might be overlooking. There’s always strength in numbers, and homebuying is no exception. If you’re looking for advice on how to buy a house as a single person, there’s nothing like having a great friend to lean on.