Do you want to own a home? As a single parent, you have many responsibilities on your plate. You may wonder if you can feasibly buy a house for your family. With a few tips and tricks, you can begin your journey to first-time homeownership. There are several points to consider beforehand, so it’s best to start as early as possible.
Here’s how to prepare yourself to buy a home for your family.
Look Into Your Income Status
Before you apply for a loan, it’s essential to take a look at your yearly income. This figure will help you understand which options you can access. It may be beneficial for you to capitalize on a loan program catered to those with lower salaries. You should also consider your annual income because you may need to pay school and property taxes.
There are loan programs that exist specifically for those with low incomes. It’s essential to note that your salary may or may not meet these qualifications where you currently live. For example, New York City-based families can be eligible for low-income programs if they earn less than $70,000 per year. Your current area likely has a lower threshold, so it’s important to see if you qualify.
Make sure you consider how much money you make as a whole. This way, you can pursue an affordable loan for your home that won’t leave you struggling financially each month.
Save Cash for a Down Payment
You’ll need to have enough money for a down payment. The average family pays less than 10% for a down payment on their first home. With this figure, you’d only be required to spend a few thousand dollars for a down payment on a $150,000 house. There are ways to decrease that number even further with government assistance. Either way, it’s smart to save as much as you can.
You can use a few tactics to ensure you have funds for a down payment. Take a look at your weekly expenses and cut out any unnecessary purchases. How much do you spend on coffees or takeout for you and your kids? You’ll find that several small adjustments make a significant difference. You could even set up an account specifically for your down payment savings so you aren’t tempted to tap into that money specifically.
You may be able to set aside additional cash through a local assistance program. Research your options so you don’t miss those opportunities.
Research Special Loan Options
There are various ways for you to obtain a loan for your house. The U.S. Department of Agriculture and Federal Housing Administration both offer solutions for low-income families. The former provides assistance for rural residents, while the latter can be used by those who need a low down payment or closing costs. Take a look at each option’s qualification details before you apply.
You could also consider the Department of Housing and Urban Development’s Homeownership Voucher Program. This opportunity only applies to families admitted through their local public housing agency. You must meet specific requirements to enroll. It’s important to note that not every city offers this avenue. Locate a nearby branch to speak with a counselor for more information.
Try to Raise Your Credit Score
There’s a chance you don’t have an ideal credit score. It’s common for single parents not to have a credit score history, as they relied on their ex-spouses for financial support. You need to consider how yours may affect this process. A loan almost always requires applicants to have a certain credit score, which could be 620 or more. A government-backed loan expects around 500.
You can improve your credit score without much effort. Do your best to pay bills on time, dispute any inaccurate information and reduce credit card balances. These steps will help you return to a level where you can easily take out a loan. You may also be able to calculate your credit score another way. If you pursue a loan through a government program, you can use rent and utility payments for a boost.
There are two crucial tasks you need to complete before you pursue a home loan. You must save for a down payment and work on your credit score. Otherwise, you’ll find that it’s a lot harder to buy a house. A high credit score will set you up for a better future, so it’s smart to start sooner rather than later.
Use These Methods to Prepare Yourself for Homeownership
Different processes need to take place before you buy a house, but they’re worth it. It won’t be long before you and your children can enjoy your own space and buy into the American dream. As long as you prepare yourself, it’s not as difficult as you think.