Single parents – here’s how you can invest in your own home

Any bank will tell you that two incomes are better than one. However, it’s not always going to be that way – and they know it. There are many families that either have one income or singles who are looking to purchase a house on their own.

If you’re a single parent looking to purchase new construction homes, then this article might be for you. There are some things you need to consider since you will finance a property on a solo income, but rest assured that it’s been done thousands of times before you. Let’s begin!

Ask assistance from a mortgage broker. Single or not, acquiring assistance from a mortgage broker to do the groundwork for you is necessary. They know most of the lenders who can work with your situation or the specific requirements that you need to meet. You could also seek the assistance of wholesale mortgage bankers FLORIDA, who typically work in a loan department of a financial institution or a bank. Your loan can be approved by a mortgage banker.

Both a mortgage banker and a mortgage broker can assist you in obtaining a home loan. Mortgage bankers and mortgage brokers differ in that mortgage bankers close loans in their own names and with their own funds, whereas mortgage brokers facilitate originations for other financial institutions. Mortgage brokers do not close mortgages in their own names; they act as intermediaries between the borrower and the lender. Mortgage brokers, unlike mortgage bankers, do not represent a single institution. Instead, they might shop around for a low rate mortgage that is appropriate for the person they are working with. So, if you want a few options for yourself concerning the loans, a mortgage broker could be preferable to a banker.

Start reducing your credit card limit. Even if the credit card/s you own aren’t being used, the credit limit can have a negative effect on your application for a loan. Say you’re keeping a $10,000 limit on your credit card for unforeseen circumstances, the bank will assess you as though you have that same amount of debt. Try reducing your credit card limit to around $3,000 to make your application more appealing to lenders.

Bigger deposit equals better deal. One income family or not, the bigger the deposit you can offer, the easier it will be to acquire a credit for your home. Aim to have at least 20% of the home cost as deposit since it means that you won’t need to pay mortgage insurance. In any case, this isn’t realistic for everyone, but still, the closer you are to that 20%, the better it is for you along the way.

Borrow what you can comfortably pay back. The lenders will tell you the maximum amount that you can borrow. Of course, you won’t really need to borrow that much, but give yourself a comfortable number, and asses the figures yourself. This means looking at your budget, and how much you can easily pay off without sacrificing other expenses.

Protect your current income. One of the things that your mortgage broker or banker will ask for is information about the insurance you have in place. Because you rely on a single income, it’s crucial to get income protection insurance to ensure that should something befall you, you can still use the service loan.

Get a guarantor. While this option isn’t available to all, it can be good so sometimes have someone that can vouch for you to help with home loan processing. Being a guarantor for someone is a big deal. Understand that what you are asking has severe consequences for your guarantor, so just make sure that you don’t take it for granted.

Shop around for a good home loan. There are virtually hundreds of types of home loans available for single income parents. One of the best considerations is a fixed rate home loan where payments stay “fixed” regardless of market swings. You can learn more about fixed rate home loans and other types of loans via providers like Newcastle Permanent or simply by going online.

End Note

Don’t let anyone discourage you from buying a home just because you’re a single parent because it’s very possible. Preparation is the key to success, therefore work through the tips above so you’ll have a clear roadmap to put yourself in the best possible position to get your very own home for you and your family.