If you're not married, divorced, or don't have an interest in merging finances with a romantic partner, you may wonder if it's possible to own a home on a single income. Fortunately, it's often feasible for would-be homeowners to purchase a property on a single income. Here are a few tips to follow when purchasing a home on one income.
1. Explore All Your Options
When applying for financing or attending open houses, it's important to explore your options. This will enable you to get the best home for your money, and it can help you locate properties that are suitable for someone with a single income.
Perhaps a conventional mortgage isn't the best option for an affordable mortgage payment; you may want to check out a government-insured loan, like an FHA or USDA mortgage, so that you're able to get a better interest rate and make a lower downpayment.
Maybe a single-family home is a little too expensive for your budget. You should check out townhomes and condos that typically have lower price tags and less maintenance. Or, if you have your heart set on a single-family property, look for a home that's conducive for a roommate or two.
2. Take Steps to Protect Your Income
Once you find and buy a new home, you should take steps to protect your income. You might lose your income due to an injury or extended illness that forces you to take time off work.
Make sure that you leave enough room in your budget to purchase short-term and long-term disability insurance. These policies will replace your income so that you still have the money to pay your mortgage.
Short-term disability insurance will replace some or all of your income for a few months if a temporary condition causes you to miss work. Long-term disability insurance will replace your income for years if you suffer a life-changing illness or injury.
3. Consider Applying with a Co-Borrower
If your credit isn't the best, this can impact the terms of your mortgage. You'll likely have a higher interest rate that will raise the amount of your monthly payment. Should the payment feel too high for your income due to the terms of your loan, consider applying with a co-borrower.
When you apply with a co-borrower, the mortgage company will take their income and credit history into account. For many homebuyers, the addition of a credit-worthy co-borrower results in favorable loan terms that yield a lower mortgage payment.
Are you ready to buy a house? Contact real estate agents to begin the process.
This website can serve as your home for information about real estate. Here, you will find articles about the buying process and others on the selling process. We've also included content related to getting a mortgage, finding a real estate agent, and scheduling an inspection. We hope that by addressing all aspects of the real estate world, we will make you better prepared to handle any real estate transactions that might be in your future. After all, real estate can be a really smart investment, but only if you buy the right home and know how much to offer. Start reading, and enjoy what you find.