Selling Your House?

Selling Your House?

Three Pieces Of Advice For Single Buyers

by Steven Stephens

Purchasing a home can be challenging when you're in a long-term relationship and using two incomes to qualify for the mortgage. However, it can be even more difficult when you're trying to do it on your own. If you're a single person pursuing homeownership, here are three pieces of advice that may make the process easier.

Be Prepared to Be Twice as Qualified

There's a saying that sometimes people have to work twice as hard to be considered half as good as another person in a more privileged position. This saying is true when it comes to homeownership. Unfortunately, there are some hidden biases in the mortgage industry against single buyers that you may have to work around to purchase the home of your dreams.

For instance, many lenders are leery about approving mortgages for single people because of the perception that having only one income means a higher chance for default, even though studies indicate this isn't true at all. To overcome the hurdles this perception can erect, it's important your credit and income meet or exceed the minimum levels required.

Many banks require applicants to have debt-to-income (the percent of income used to pay all your debts) ratios of less than 43 percent to qualify for a mortgage, for example. Therefore, you should endeavor to get this number as low as possible. A lower DTI number may make the bank feel more confident you can pay the mortgage without any problems and, thus, increase your chances of getting the loan.

There are many other things that affect your ability to qualify for a loan. Research these factors and look for ways to exceed them.

Consider Getting Income Protection Insurance

Since you are the only source of income for your household, it may be a good idea to invest in some type of income protection insurance to ensure you'll still have money coming in if something happens and you're unable to work. For instance, some disability insurance products will replace a portion of your income if you are temporarily or permanently disabled.

Not only can this type of insurance provide you with peace of mind, but it may alleviate lenders' concerns about a possible default. Having this insurance guarantees you'll have the cash to continue paying your mortgage, and it shows you're thinking ahead, which is something lenders like to see.

Accordingly, you should also avoid job hopping while shopping for a home and mortgage. Banks like it when people have been at their jobs for a long time because it shows stability. Even though you may hate your job and are chomping at the bit to leave, wait until after you get the mortgage to hand in your two-week notice.

If you do end up leaving your employment in the middle of a house hunt, you may want to put off applying for a mortgage until you've been with your new job for at six months to a year. By that time, the training and trial period new hires are typically subjected to will have ended, indicating you have secured your position with your new employer.

Plan for Repairs

Repairs and maintenance are a fact of life for homeowners. However, since you are only working with one income, routine and unexpected repairs will have a bigger impact than if you were buying a home with another person.

Therefore, it's a good idea to build a repair fund you can dip into when something needs to be fixed. You can save up the money from your income. Alternatively, you can obtain a home equity loan if you're buying a house whose market value is more than its sale price (or expected to rise in the near future). There are many ways to put together a repair fund. The most important aspect is you have it and it is liquid enough you can access the money whenever it's needed.

For more advice on purchasing a home for sale when you're single, contact a real estate agent.


About Me

Selling Your House?

Hi, my name is Jessica Williams. Thanks for stopping by my website. I have moved a number of times and in three cases I have had to sell a house. The first time I sold a house I listed it with a real estate agent. The second time I did it myself. The third time I listed with a realtor. You can probably ascertain from this information that I found listing with an agent the better route. I managed to sell my house by owner that one time, but never again. There is too much involved and too great a risk for errors. There’s a bunch of paperwork and preparation that goes into selling a house, more then I imagined. My goal here is to share my experiences with you. My hope is to make your experience as pleasant as possible.