Posted by Kathleen Helbig on Wednesday, July 20, 2022 at 12:20 AM By Kathleen Helbig / July 20, 2022 Comment
It may be more difficult for single parents to purchase a home than couples with two salaries. However, it's simple to understand why many single parents are ready to purchase a home. Owning a home is essential to creating a secure financial future and choosing the ideal kitchen and playroom.
Most people can undoubtedly afford to buy a home, even though it may feel like an increasingly unattainable goal for single parents. We consulted professionals to get advice on how to get a great mortgage as a single parent to aid you along this road.
Avoid Adjustable Rates and Multiple Applications
Getting a mortgage with a fixed rate is essential because the Federal Reserve may increase interest rates shortly. A 30-year fixed mortgage will make it possible for single parents with children to predict their monthly spending accurately. Pre-payment penalties are another thing to be cautious about. These are the fines the lender would impose if you didn't sell the house within the predetermined time frame. Avoid submitting several mortgage applications to various lenders to find the best deal.
Take Advantage of Local Loans
Try to locate a local lender, regardless of the type of loan you ultimately attempt to obtain. Working with a local mortgage professional in your market can be a huge asset. Many online platforms offer ostensibly great deals but utilize loan officers out of the area or in call centers that may be completely out of the market. Sorting out market-specific details might be exceedingly difficult as a result.
Make a Significant Down Payment If You Can
Making a sizable down payment on a home will be beneficial regardless of who you are, your financial condition, or your personal circumstances. A large down payment will not only increase your chances of finding a reputable lender, but it will also result in a better mortgage rate. Additionally, it will reduce your future monthly payments.
Remember the 25% Rule
Mortgage payments must be made solely by single parents. In light of this, it's advisable to budget generously when looking for a home. Giving your budget breathing room for emergencies and additional child care expenses is vital because you have more "what ifs" to worry about as a single parent. Your monthly mortgage payment, including taxes and insurance, should not exceed 25% of your income. By doing so, you can still meet savings objectives like saving for retirement and college while having enough money to pay for housing bills and child expenses.
Ask for Benefits
Make sure to declare any alimony and child support payments you receive when applying for a mortgage. Benefits are a single parent's greatest weapon in the fight against lenders. It's important to demonstrate your ability to pay as a borrower. Therefore, emphasize the money you receive as child benefits, tax credits, and maintenance fees since all of them can be considered.
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