I remember the first time I spoke to a crowd about buying a house. It was a group of young women at a local meetup in Austin. Many of them were unmarried and worked for themselves, or in a creative field.
Many women approached me after that, and I was pleasantly surprised by how many single women were thinking about buying a house by themselves. They didn’t know where to start and had very little information on how the process even worked. Would they qualify?
Don’t get me wrong, the dual income that comes with buying a house with a partner or spouse may make this process easier, depending on your situation. This is why many people have chosen to wait until marriage.
Yet, if you have the right education and guidance, you can find a way. Believe it or not, you can get creative with purchasing real estate. Whether that be partnering with a friend, family or utilizing Airbnb to rent out part of your property for some extra cash.
So, what should a single lady who’s curious about buying do?
Get Your Finances Together ASAP
Why? You may be shopping for properties that are way too expensive for you.
First thing you need to do is assess your budget and see how much mortgage you can afford. What you’re paying in rent is a good starting point, but don’t forget about things like home insurance or property taxes.
Reviewing your spending can show you how much flexibility you have month to month and also show you areas you can cut back in to boost your down payment amount!
Next, it’s time assemble your avengers real estate team! You’ll need an agent you can trust and who can move quickly in a competitive market and a lender to get you access to a mortgage.
Then you’ll need to select a mortgage lender to find out what you would qualify for and what your monthly payment would look like.
Honestly, this is many first time buyers least favorite part. A lender is going to ask you for a lot of financial information. They may ask you for some information that your family doesn’t even know. But don’t worry, it’s like going to the doctor…they have seen it ALL.
Some paperwork you may have to provide includes the last two to three years’ worth of tax return statements, recent pay stubs, the last 12 months’ worth of bank statements, and a letter from your employer stating that you are gainfully employed.
A lender has certain criteria that will help them determine how much you qualify for or if you qualify at all. Your job history, credit score and debt to income all matter. You’re asking to borrow an enormous amount of money; they need to make sure you’re able to pay it back!
Compare Renting vs Buying
Although I like to preach that you don’t need to wait until marriage to buy a house, that doesn’t mean I think buying is a good option for everyone.
Think it through:
- If you plan on staying put for a few years and currently pay high rent, it’s probably a good idea to buy.
- If your job is unstable, you may want to wait.
- If you get a fixed-rate loan, your monthly payment will not change over the loan term, BUT rent will continue to rise.
- There are tax benefits you can utilize when you buy a property. You may be able to have multiple write-offs: mortgage payment, homestead, home office, etc.
Personal finance is personal. If you’ve got a good low rent, in an area of town you love, buying is not for you. But if you’re ready for you slice of the American Dream, buying is a way to diversify your assets and build equity over time.
Review your housing and budget options
After you know how much of a home you can afford, begin browsing through your options.
You can start with a simple online search. Find a realtor you trust and start asking them housing questions. Tell them your budget and where you want to live, and they’ll tell you if it’s realistic or not.
Being single and searching for a place to buy, you get the chance to pick out exactly what you want. You alone get to make the final decisions!
To turn your home into an INVESTMENT you need to keep in mind resale.
For example, it’s usually better to buy a two bedroom property over just one bedroom. They tend to appreciate better.
It’s your life, so weigh pros and cons. If you want a certain quality of life that you think only a one bedroom property can give you, go for it! I’m a big believer in your primary home being your happy place.
Remember that on top of a down payment you will also need to pay other closing costs such as lender fees, prepaid expenses, appraisal and the inspection. Need a bit more money? Try reaching out to your family. They would probably rather give you money towards a house over buying you material goods for your birthday/holidays.
So, to all my single ladies out there who have a dated timeline stuck in their brains (school, job, marriage, then home), I hope this helps you switch up your mindset. Simply weigh the pros and cons and you may find buying a house now may be beneficial to you in the long run!
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Kristina Modares is a realtor in Austin, TX and founder of Open House. Please feel free to reach out if you have questions about the home buying process!