If you live alone and are ready to stop renting: It might excite you to know that with some planning and guidance, you can easily turn your dream into a reality.
According to Freddie Mac’s recent research, 28 percent of households in the U.S., totaling 36.1 million, are sole-owner. Single households only continue to increase. Within the last 40 years, this number has almost doubled — a trend that isn’t likely to decline.
Freddie Mac states:
“Our calculation suggests that there will be an additional 5 million sole-person households in the United States by the next decade. This means 42 percent of the household growth will be contributed by sole-person households…”
If you’re a single first time home buyer (or a single seller trading up), heeding these simple guidelines can help to ease stress and expedite the process.
4 must-know tips to smooth your path as a single buyer
It’s important to:
1. Get familiar with your credit score.
When you buy a house without a co-borrower, you qualify for your mortgage exclusively using your own credit and financial history. Meaning, your lender will only be assessing your credit score, so it needs to be healthy and strong. It’s always smart to request and review your annual credit report in advance, particularly if you’re purchasing solo.
The takeaway: Know your score to avoid any surprises. If you have questions about where it falls — and what may be required to strengthen it — reach out to a local loan officer for advice.
LoanFly: Where you go to make mortgage easy. Prequalify now and access your credit score for free.
2. Research down payments.
First and most importantly, your down payment isn’t likely to be as much as you expected. If you have concerns, learning more about down payment amounts and assistance options (all information you can request from your loan officer) may help ease your mind.
Rob Chrane, Down Payment Resource CEO, says:
“Buyers should discuss their program options with their loan officer and real estate agent to make sure they choose the program best suited to their personal needs.”
The takeaway: Utilize your relationship with your loan officer as intended — to provide you with real, accurate numbers you can use to start saving for a down payment, as well as loan types and assistance programs that may help to reduce or eliminate this cost altogether.
3. Take your future needs into account.
Set aside some time to think about both your wants and needs. Where would you like to live? What style of home do you prefer? And specifically, what features should this home have to support your lifestyle and goals for the future? Priorities may range from a shorter commute to a big backyard to accommodate one or more pets to a spare room that you can rent or turn into a home office.
The takeaway: Once again, look to the professionals for insight. Your loan officer can give you an exact housing budget when you prequalify, and your real estate agent can help you determine which key features are feasible within your price range.
4. Win with a prequalification letter.
Thanks to record-low mortgage rates, the current housing market remains competitive. All buyers can benefit from presenting a strong offer to stand out — though you may especially appreciate this advantage when purchasing solo. If you want to make a winning offer, make sure you have a prequalification letter in hand.
Freddie Mac explains:
“The preapproval letter from your lender tells you the maximum amount you are qualified to borrow. Getting a preapproval letter is not a loan guarantee, it simply states how much your lender is willing to lend you…”
The takeaway: Similar to a game of chess, a bold first move tells your opponents (other buyers) that you’re a contender. In today’s market, getting prequalified is no longer optional for home buyers; sellers are more likely to give preference in a multi-offer situation to a buyer who appears serious. Look for a lender that offers borrow-generated prequalification letters to make this step much easier.
Though it can feel challenging to purchase a house on your own, it doesn’t have to be overwhelming. That’s what your home buying team is here for — to offer support and insight each step of the way and to help you leverage the unique opportunities in today’s still-booming market.
The number of single-person households is on the rise
As a single first time home buyer, this may be your year to join the ranks of millions of other sole owners. Rest assured that your dream home is within your reach. Find out how much more you can afford at today’s historically low rates when you prequalify.
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.