5 Tips for Single Parents Buying a House

By Kara Reynolds | Feb 18, 2022

Between running a household, paying the bills and taking care of their kids, single parents have little time for much else. Add buying a home to the list, and you’re sure to feel exhausted and overwhelmed, even before you begin the process. Nonetheless, scoring a great property is possible, even in a single-income household. In 2020, more than one in four homebuyers were single — 17% moms and 9% dads. 

Though these parents likely faced more challenges than couples, they learned to take advantage of available resources and plan for the homebuying process. Here are a few tips to help you do the same. 

1. Build and Protect Your Savings 

Buying a home is the biggest transaction you’ll probably ever make. In the United States, the average sales price of a new home is $443,200. Of course, you may pay more or less depending on a countless array of factors. Plus, you’ll have maintenance costs, property taxes and other routine expenses to deal with, even after you move in. Case in point, the whole fiasco is expensive, so you must start saving now. 

Rework your budget to prioritize savings and consider opening an Individual Development Account. This account helps low-income families build assets by matching their contributions, often at a 2:1 or 1:1 ratio. Remember to safeguard your hard-earned savings with income protection or disability insurance. That way you’ll still receive a paycheck, even if an unexpected event disrupts your regular income. 

2. Nix Debt and Improve Credit

In addition to saving for a downpayment, you’ll also want to prioritize paying off debt. The more debt you have, the less likely you are to receive pre-approval for a loan. Lenders typically look at your debt-to-income ratio, which pits what you owe against how much you earn. In most cases, they’ll approve borrowers with a DTI of 36% or lower, with no more than 28% going towards servicing your mortgage. 

Lenders also consider your credit score when determining whether to approve your mortgage application. Conventional loans require a score of at least 620, and buyers with a score above 760 often qualify for the best interest rates. That’s why it’s so important to keep card balances low, promptly deal with collections accounts and pay your bills on time each month. The more consistent you are, the quicker your score will increase. 

3. Apply for Special Loans

It is possible to get a loan with bad credit, but finding one can be difficult. You may have to accept less favorable terms like higher interest rates, which could affect you for years. You might also apply for special loan programs for single parents and first-time homebuyers. These programs often come with more forgiving terms. 

For instance, you can qualify for an FHA loan, regardless of your credit score. This option is affordable and accessible for most low-income families because it only requires a 3.5% to 10% downpayment. If you’ve ever served in the armed forces or are receiving a survivor’s pension, you may also qualify for a VA loan from the Department of Veterans Affairs. This loan requires no private mortgage insurance or downpayment, making it easier to afford your new home from the start. 

4. Look for Local Grants

Aside from FHA and VA loans, there are many payment assistance programs available to single parents. Both local and state organizations offer grants to help single-income buyers purchase homes. Others offer downpayment assistance programs if you’re looking to acquire some financial help.

If you can’t find grants in your area, consider applying for a homeownership voucher through the Department of Housing and Urban Development. This monthly financing and affordability program will supplement your income to help pay your mortgage once you find a seller and lender who’s willing to work with you. Contact your local housing agency to determine whether this option is available and if you qualify. 

5. Know What You Want

Once you begin the homebuying process, your emotions — and other peoples’ opinions — will come into play. Whether you hire a realtor or work with a real estate attorney, you must know what you want in a house before you start looking. Otherwise, you might make an impulse buy or a decision you can’t back up financially. 

Figure out what kind of home you need before you start looking. Consider your and your kids’ needs, interests and lifestyles when choosing a specific location. Then, narrow down your options by the number of bathrooms, bedrooms and so on. This way you find a home that fits the way you live, rather than a home you’d have to fit your life into. 

Taking Control of Your Future

When it comes to purchasing a home, the entire process begins and ends with you. You manage every aspect of your family’s life. What’s one more responsibility, right? If it means you get a whole place to call your own, what’s stopping you from taking initiative? 

Take control of your future and make a single step in the right direction. Whether it’s putting $60 in an IDA account each month or compiling a list of potential lenders, there’s something you can do to turn your dreams into reality. It might take a while, but buying a house as a single parent is possible. You can make it happen. You must simply begin. 

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