Homeownership is a dream for many Americans. But if you’re a single parent, you may think that buying a home is out of reach. While it can be challenging to buy on your own with kids, it’s not impossible. In fact, there are programs available that can help you achieve your dreams of becoming a homeowner. Here’s what you need to know if you’d like to buy a home as a single parent.
Check your credit report
Before you begin your journey to homeownership, you should get a handle on your current financial situation. This begins with checking your credit report. Lenders will be looking closely at your credit report to determine your eligibility. We recommend ordering a copy of your credit report at least six months before you begin your home search. This allows you plenty of time to check it for errors so that you can begin the process of having them removed. It also gives you time to improve your credit score. The higher your credit score the more likely you will be to qualify for a home loan. You’ll also get a better interest rate which will save you money over the life the loan.
Make a budget
The next thing you should do is to create a budget. This will help you determine how much house you can afford. When you’re making a budget, be sure to include all your monthly expenses. You’ll also want to take into consideration not only your potential monthly mortgage payments but also other costs associated with buying and owning a home. These include your down payment, insurance premiums, property taxes, HOA fees, closing costs, and moving costs.
Research assistance programs
Buying a home on your own can be intimidating. Fortunately, there is assistance available. If you’re a member of the military, then look into assistance provided through the Veterans Administration. You may qualify for a VA loan which requires no money down. You should also contact the Department of Housing and Urban Development (HUD). They offer housing counseling services which are offered at low cost or even for free. You may also qualify for homeownership vouchers or monthly financial assistance. Also, try contacting your state’s Public Housing Assistance program (PHA) to determine other programs that may be available to you through the state.
Understand your mortgage options
When you’re in the market for a home, it’s helpful to understand that you have many options available to you when it comes to a mortgage. Just as with any purchase, it pays to shop around. One of the biggest hurdles to homeownership is the down payment required. Conventional loans typically require at least 20 percent down when you buy a home. That can be out of reach for many people, particularly if you’re a single parent. Fortunately, there are other loans available that don’t require a big down payment. VA loans, as mentioned above, are a great choice for those in the military community. You should also check out FHA loans and USDA loans. These loans are backed by the federal government and require down payments of as little as 3.5 percent.