One thing I think most people can agree on is that the life of a single parent is filled with challenges. One of the biggest challenges is having to manage finances on a single income. Many single parents may feel that being a homeowner is out of reach for them. But with rents going sky high, filling the pockets of a landlord when they could be investing in their own future just doesn’t make sense.
If you are a single parent and you think you can’t purchase a home, think again! There are specialized loan options and assistance programs available to help single Moms and Dads become homeowners. For example, you will find flexible mortgage qualification criteria, reduced down payment requirements and assistance with up front costs.
Here are some loan types, grants, and strategies that can make your dream of home ownership a reality:
HomeReady
The HomeReady loan, backed by Fannie Mae, is designed for low to middle income buyers, so it is a great option for single parents. You be able to make a down payment as low as 3% and it offers reduced private mortgage insurance costs, thus lowering you monthly mortgage payments. Another positive feature is that additional household income will be considered with this loan, such as contribution from roommates or renters, which will make it easier for single parents to qualify.
Home Possible
Freddie Mac has something called the Home Possible program. This is another wonderful option for single parents trying to save on the upfront costs of purchasing a home. With a down payment requirement of only 3%, the Home Possible program allows people with limited savings the ability to buy a home. In addition, this program allows non-occupant co-borrowers, such as a parent or other relative, to contribute on the mortgage application. This additional support may be exactly what a single parent needs to achieve home ownership!
FHA Loans
A popular choice for single parents with lower credit scores and/or minimal savings, FHA loans are government backed loans that require a down payment as low as 3.5% and are available to buyers with credit scores as low as 580. With lenient debt-to-income ratio requirements, it is an ideal option for single-income families. FHA loans also offer the security of predictable terms, something that single parents on a budget can really appreciate.
VA Loans
If you are an eligible veteran, active-duty service member or surviving spouse, VA loans can be very advantageous. No down payment is required with a VA loan, and therefore private mortgage insurance isn’t necessary. This will give you significant monthly savings on your mortgage. In addition, it provides other benefits like limits on closing costs and competitive interest rates. A VA loan is an awesome choice for single parents who have served in the military.
USDA Loans
USDA loans cater to buyers that want to live in rural or suburban areas. They offer 100% financing with no down payment required. It’s ideal for single parents seeking affordable housing outside of urban areas. They often feature lower mortgage interest rates and reduced mortgage insurance premiums. All-in-all it is a budget-friendly option for families!
Conventional Loans
Another viable option for single parents who have high credit scores is a conventional loan. This loan requires as little as 3% down and offers competitive interest rates. They are different from government-backed loans in that they offer more flexibility in terms of property type and loan limits. A conventional loan can be a great choice for single moms and dads.
There are also grants available for first-time home buyers who are single parents. They provide funds that do not need to be repaid which help to pay for costs like down payments and closing costs. There are state and local programs that offer grants specifically for first-time buyers based on income, location and family size. This can be a life-changing resource for single moms and dads, allowing them to purchase their first home.
The idea of purchasing a home as a single parent can seem overwhelming. But with careful planning and preparation, it can be done. Don’t rush things. Take the time to assess your financial situation, including your income, debt, and credit score. Research loan options and assistance programs and find the one that best suits your needs. The first step is to get pre-approved with a trusted lender, which will not only allow you to figure out your budget for a home but will also demonstrate to sellers that you are a serious buyer.
Most importantly, work with an experienced, Professional Realtor like Sandra Nickel who understands the unique challenges of buying a home as a single parent. With the right Realtor and resources, you will find the perfect home to meet your budget and your family’s needs.
If you are in the market to buy or sell a home (or both), let Sandra Nickel and her Hat Team of Professionals assist you with all your real estate needs! Call them today at 334-834-1500 and check out https://www.homesforsaleinmontgomeryalabama.com for more information!
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