Tips For Single Homeowners

Homeownership is viewed as a dream of only the privileged, I know that my parents were friends who got married because they followed the American dream of homeownership and got together to start a financial partnership Their story of course was a success!

But according to an analysis of U.S. Census Bureau data, now the share of U.S. single homeowners is the highest in a century.

With the home prices rising, inventory being low, and stricter mortgage structure many wonder if the buying power that comes with a single income is enough.

If you are organized and take care of a few things homeownership is entirely possible.

Here are a few tips and advice from some of the best real estate and financial professionals in the country for a single person to buy a home within their budget.

HAVE A COMPULSORY SAVING HABIT

Having one income to pay the bills is not a motivation for the lender to approve your loan, in case of a medical emergency or a reduction in income will affect the mortgage repayments.

If you have a substantial bank balance with funds for the initial down payment it would be a brownie.

LOOK OUT FOR GOVERNMENT-INSURED LOANS

Government-insured loans are a good option as they have lower down payment requirements.

The mortgage program run by the Federal Housing Administration (FHA) requires only 3.5%, whereas a conventional mortgage requires a 20% down payment.

If you are a veteran then a VA Loan that is backed by the Department of Veterans Affairs can help you to get lower interest rates and does not require any down payment or monthly mortgage insurance premiums.

START SMALL

A single homeowner without a partner or children doesn’t require too much space.

A smaller home will result in a much lower mortgage and thereby will reduce all your costs and bills at the same time you already become a homeowner which will boost up your morale.

IMPROVE YOUR CREDIT SCORE

Before trying to seek a mortgage pay attention to your credit scores.

A lot of debts will make securing a mortgage impossible. You’ll need a credit score of around 600 for most loans, but a higher score will guarantee you lower interest rates.

In 2019 according to data from the Federal Reserve, 90% of mortgages were taken out by people with credit scores higher than 647, and 75% of mortgages were taken out by people with over 700 scores.

As payment history makes up one-third of your credit score the secret of raising your credit score is to pay off all significant outstanding debts and pay all your credit cards and bills on time.

AVOID BIG MORTGAGES

Be extra cautious about the size of your monthly mortgage payments. Similarly, think twice before opting for an adjustable-rate mortgage (ARM). As ARM rate will change after the initial period, and it will get adjusted based on market indexes.

So the initially low ARM rate will shoot up and raise your overall monthly mortgage payment.

CONSIDER A CO-SIGNER

If your credit is not impressive or any other issues interfere with your dream of owning a home, you may consider a co-purchaser to your mortgage, it helps you in getting a better loan option.

Let your dream house not boggle you down instead let it make you happy and proud.

Reference Source: Realtor.com

https://www.compareclosing.com/mortgagenews/tips-for-single-homeowners/

Comments

Public Feedback Requested By CFPB

The Home Mortgage Disclosure Act underwent certain changes and to evaluate whether it is meeting the stated goals of detecting discrimination in mortgage lending the Consumer Financial Protection Bureau is seeking comments. The CFPB requests for assessment of the mortgage disclosure law and checks if it meets the objectives of the Dodd-Frank Act . To abolish discrimination in mortgage lending in 1975 the Congress enacted . The bureau said the request comes after an August report found that mortgage lenders as compared to white applicants were charging higher interest rates and denying credit to Black and Hispanic applicants. The bureau said that with this evaluation the CFPB will be able to maintain a fair, competitive, and non-discriminatory mortgage market. They added that the assessment is an opportunity for the Bureau to get an idea if the earlier HMDA rulemakings have improved upon the data collected, thereby reducing loans on financial institutions, and streamlining and mo

What is an Appraisal Contingency? — Best Guide for Homebuyers

About Appraisal Contingency If a home is appraised for less than the purchase price included in the contract then there is a provision that is included in the purchase contract allowing homebuyers to back out of their contract this is termed as an appraisal contingency clause. Buyers who use financing to buy a house or are buying homes in areas where prices are volatile commonly use Appraisal contingencies. How do Appraisal Contingencies work? Purchase offers have appraisal contingencies inserted into them to notify the seller that the buyer intends to have the property appraised as part of their purchase for the financing process. If th e property doesn’t appraise for the amount the buyer offered to pay then this contingency allows them the option of backing out of the contract without losing their earnest money deposit or facing other penalties. During an appraisal, a licensed professional is hired by the homebuyer to examine the property and evaluate it against the recent sal

What is Fannie Mae and Freddie Mac?

Understanding Fannie Mae And Freddie Mac What is Fannie Mae and Freddie Mac? Fannie Mae or FNMA is a nickname for Federal National Mortgage Association. It was established in 1938. It is a Government-sponsored Enterprise (GSE). In 1968, Fannie Mae ceased to exist as a government entity and became quasi-governmental, federally charted corporation to buy mortgages other than those insured by the Federal Housing Administration, otherwise known as FHA. Freddie Mac or FHLMC is a nickname for Federal Home Loan Mortgage Corporation. Freddie Mac is also a government-sponsored enterprise (GSE) which was brought into existence in the year 1970 by the Congress. It provides competition to Fannie Mae and provides funds availability in the secondary mortgage market. What is Fannie Mae's and Freddie Mac's Role? Fannie Mae’s purpose is to create a secondary market for the purchase and sale of mortgages. The secondary mortgage market is where home loans and s

How to Use Home Equity for Remodeling Projects

Important Guide How to Use Home Equity Everyone has to live somewhere and, everyone has to invest their money in someplace. So what happens when where you live, meets up with where your money is invested? Today we are going to discuss on how to use home equity for remodeling projects and things to know before using it for remodeling. For most homeowners, it is a choice between paying cash or borrowing against the equity that they have build up in their home. HELOC Or HEL? Interest rates are still significantly low, and we are not sure how long they are going to stay that way. And home values are still rising at least on average. So taking out a home equity line of credit (HELOC) or a Home equity loan (HEL) may seem like a sensible financial move. Not always the case We have explained the difference between the HELOC and HEL in our blog post “ About Home Equity Loan / Home Equity Line Of Credit .” It depends on the individual’s needs to choose between t

COMPARE CLOSING LLC

Search This Blog