A Basic Home Buying Guide for Single Women
Guest Blog written by Lucille Rosetti
Today, more than one in five homebuyers are single women. However, women are faced with various economic challenges when it comes to affording their desired home. In many urban centers, men’s higher income allows them to afford more homes than women. However, this shouldn't scare women away from purchasing property. There are many ways in which home ownership can be a very real and attainable goal for single women.
Know How to Handle Property After Divorce
If you’ve recently gone through a divorce or a break-up with someone, it's important to split up mutually owned property to satisfy both parties. You have a couple of options for this. First, you can sell the house and split the money that you get from the sale (however, if one of you wants to keep the home, it will have to be refinanced). In this case, the bank will want to know that you have the available funds to buy out your ex-partner for their share of the property. Alternatively, couples may continue to co-own a house if selling isn't realistic at the time or neither partner has the means to buy out the other.
Assess Your Financial Health
Getting an idea of your financial health will let you know if home ownership is realistic for you. First, assess your net worth by adding up the value of everything you own and subtract everything you owe. As you keep track of your net worth over time, you’ll be able to see whether you are making smart financial decisions. If your net worth is increasing over time, you may be able to afford the additional debt of a mortgage. However, if your net worth is going down, home ownership may not be in your near future.
You'll also need to have a handle on retirement and emergency savings before putting money into a home. Emergency savings should cover at least three months of living expenses if you're suddenly unable to work. When it comes to retirement planning, ensure you're contributing your maximum amount to your retirement accounts.
Get Your Credit Report
Many months before you plan to buy a house, get a credit check and go over your reports. Lenders use these reports to determine whether they will lend money to you and what interest they’ll charge. Talk to a lender about what kind of options are available to you and whether you qualify for a low down payment. Eliminating credit card debt can help improve your credit report. WiseBread recommends paying off your highest interest rate card first. That way, you can invest the money saved from paying interest on that card into paying off other cards.
Come Up With A Realistic Budget
When you budget for your new house, keep in mind that you shouldn't pay more than 28 percent of your income towards your monthly housing expenses. This includes mortgage payments, taxes, and insurance. You'll also want to budget for house inspections, utility bills, and regular maintenance on the home. If you need help, use an online calculator to determine the estimated monthly expenses of owning a home.
Look for Cheaper Properties
You can find more affordable properties if you know where to look. Seek out fixer-uppers in need of simple cosmetic updates. Or, talk to a local real estate agent about finding foreclosed homes in your area. Alternatively, look for properties that have been on the market for quite a long time since their owners may be desperate to sell and likely to settle for a lower price. According to Realtor.com, the best time to buy a cheap house is during the fall. During this season, you'll have less competition from other buyers, and homeowners are often keen on selling their property as soon as possible.
Getting your financials in order and finding the perfect affordable home is a great feeling. But don't close the deal just yet! Make sure you thoroughly research the neighborhood of your new home to determine if it's a safe place for a single woman to live. Talk to neighbors and really get to know the area. Once you feel comfortable there, all that's left to do is move in!