Putting off buying a home because you’re single? Being a single homebuyer is more common than you may think, in fact, 29% of recent buyers were single, according to the National Association of Realtors (NAR). That means you can enjoy your singlehood and become a homeowner too. So, don’t let your nerves get in the way and remember, the mortgage process for a single homebuyer is the same as it is for any other borrower.
How to buy a house on a single income
Buying a home on a single income is not impossible, it may just mean you need to be more strategic about your budget. A good place to begin on your single income homebuying journey is to use tools like this free home affordability calculator to get an idea of what your homebuying budget may look like.
It’s also wise to talk with a home loan expert, like a PrimeLending loan officer, to help you understand how to harness your buying power to reach your goals. That way you can keep your loan officer on speed dial for any home loan question that pops up.
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Getting a mortgage for a single person
Since marital status is not a consideration when you apply for a home loan, the process of getting a mortgage for a single person is the same process as it is for anyone else. In a broad sense, when you get a mortgage, a lender will need to know the price of the home, your debt-to-income ratio (DTI), your income, credit and employment histories.
The basic documents you will need to provide your lender include, but aren’t limited to:
- Two years’ worth of W-2s or 1099s
- Two most recent paystubs within the past 30 days
- Other income records such as Social Security, disability, child support, alimony, etc.
- Two months’ bank statements on all of your accounts
- Copy of your driver’s license
Understanding your DTI
Your DTI is your total monthly debts divided by your gross monthly income, or the percentage of your monthly income that is used to repay your monthly debts. Common debts that may be included in calculating your DTI are rent, credit card debt and other loan payments like student loans or car loans. While most lenders typically look for a DTI below 48%, there are several loan programs that are suitable for a range of DTIs.
How Loan Lift helps single homebuyers
When you’re single and want to buy a home, it’s natural to feel a little anxious during the application process. Take a deep breath and let out a sigh of relief because PrimeLending’s Loan Lift can help capture more financial information than traditional tools.
Loan Lift can track your non-traditional payment methods to give you the credit you deserve for your positive rental and income histories. It captures a record of your responsible financial habits across apps like Venmo and Zelle® to show proof of rental history and track your income to help you get approved for a mortgage.
Homebuying tips for singles
Now that you have an idea of how the mortgage process works, let’s get your head in the mortgage game with some tips to help you achieve your homeownership goals.
Know your credit score. Since lenders take your credit score into consideration when you apply for a mortgage, it’s important to understand what’s in a credit score and make sure the information presented in it is accurate.
Don’t skip the home inspection. There are probably very few things that feel worse than settling into your new home only to have unexpected maintenance pop up. A good home inspection can uncover any issues with the home, it’s structure or it’s internal systems (like plumbing, electrical, HVAC, etc.).
Know your down payment options. Did you know that you’re not actually required to make a 20% down payment? There are several home loan options the require low to no down payment at all.
Get approved before you start house hunting. You wouldn’t buy a car without setting a budget, would you? By getting approved for a mortgage before you start shopping for a home, you can go into your homebuying journey knowing exactly what you can afford. Plus, you can shop more efficiently by looking at homes that fall in your price range.
