As a parent, everyone wants the best for their families. Everyone wants to provide themselves and their kids with the best lives possible and this includes having a home. It may seem overwhelming and daunting to consider purchasing a home on a single source of income. A lot of single mothers wish to buy a home that they have dreamt of and take the deep jump into an exciting and often confusing world of mortgages and home buying. This guide will help you to provide the right way, resources, and tips on how to purchase a home as a single mother with a low income. Following are the tips and resources that will help you to create a life of comfort and abundance for yourself and your kids.
Can A Single Mom With Low Income Buy A House?
Yes, single moms with low income can purchase a house as long as they can win the right housing resources and meet the home loan requirements. The process to purchase a home can be stressful and daunting. While raising children, taking care of the household and working full time needs meticulous planning and execution. One thing to consider while buying a house for single mothers with low incomes is the money upfront to get home. There are closing costs, a down payment, and other small fees that you have to pay. On getting a home sometimes improvements are also required. Single moms should also prepare themselves financially well in advance. This will help them to know what they are looking for when they are going to purchase a house such as bedrooms, space, and amenities. Once you become certain of your needs you can be confident in your purchase decision and home search.
Should You Purchase A House As A Single Mother?
Deciding to become a homeowner must not be taken lightly. You might wonder whether homeownership is making sense for you. Therefore the first and foremost step in purchasing a house as a single mom is to decide whether it is the right path for you and your family in the present situation. Buying a home is a big decision and you should not rush into it. You have to cover the long-term mortgage payments while buying a home and also determine whether you have sufficient funds to make a down payment. Mortgage approval also includes cosmetic upgrades, closing costs, and home repairs if you are not making new construction in your home. You may have to come across things that must be addressed within your home before moving. The first and foremost step in purchasing a house as a single mother is to figure out the amount you can afford to spend on the house. Consulting with mortgage professionals or using an online mortgage calculator may help you to learn the ballpark price.
Programs That Can Help Single Moms To Buy A House
Single moms can avail a lot of programs that help them to buy a new house including mortgage grants or assistance in buying their first home. If you are having an issue with your credit score then there are programs like USDA Rural Development and FHA loans that will not consider your credit history to grant you a loan. Instead, you can use other sources such as utilities and rent and show a good utility payment record for a year.
1. Single Mom First-Time Home Buyer Programs
The best tip for single mothers who are saving money for a house is to consider their savings account before purchasing a home. The Individual Development Account enables single mothers and other home buyers to put money into their savings accounts. This is a special bank account that helps you to save for your first home, education, or business.
Habitat for Humanity is an organization that repairs old homes and builds new ones for families in need. In this way, you not only get a custom-built home for your family but also get a home loan completely interest-free. You can learn more about the selection process of Habitat for Humanity. The HUD or the United States Department of Housing and Development sells foreclosed properties throughout the country. You can check out the listing of HUD homes to determine a foreclosed home in your area. The Federal Housing Authority or FHA provides loans to first time home buyers including single mothers at a 3.5% down payment. To obtain an FHA loan you need not have minimum income requirements. Single mothers having a credit score between 500 to 580 can obtain an FHA loan easily.
2. Mortgage Grants For Single Moms To Purchase A House
Saving funds to make a down payment on a house can be financially difficult for a lot of single mothers. There are mortgage grants available for single mothers that assist them to purchase a house and is a fairly easy procedure to apply. Home buyers throughout the United States can apply for mortgage grants and receive the grant towards the cost of their down payment. Such funds are not required to be paid back and are known as down payment assistance grants which typically originate from nonprofit agencies and local state governments. There are certain rules, guidelines, and course stipulations to receive a down payment assistance grant. For instance, the home which you are purchasing should be your primary residence and not a vacation home. These grants are also income based.
There can be special mortgage grants that are available for firefighters, EMTs, K12 teachers, law enforcement officers and other persons in specialized careers. Besides, single mothers can also qualify for Good Neighbor Next Door Grant which gives recipients at least 50% off on their home value. Single mothers can check with their bank or mortgage lender to learn discounts on closing costs and down payment assistance. A lot of lenders provide this option to help single mothers and other low-income individuals to get their first home. Moreover if you are a current service member or a veteran then you can qualify for zero down VA loan. One of the most effective and best ways to learn whether you are eligible for a grant program or not is to consult with an expert mortgage lender who can assess your present situation and circumstances.
How Can Single Mothers Avail A House?
When you are a single mother you have to juggle a full-time job, full-time parenting and must try to make ends meet. Fulfilling a dream-like purchasing a home may seem out of reach. Homeownership requires some sacrifice and work, however, you can avail programs and resources that can help you even though you are not earning a lot of money. Following are the tips in which single moms can avail a house even on a low income.
1. Saving For A House
As a solo mom, one of the biggest things is to save money when you decide to purchase a home. It is essential to have a solid savings plan that can make sure you have enough money for paying your fees and down payment once you get approved for a loan or mortgage. Getting your finances in advance will help to make the process of purchasing a home easier. Try to cut your household expenses and try using savings in a special account to purchase your home. If your income is a major issue then you can begin a side hustle that will be used specifically for saving money for your home as a single mother.
2. Make A Good Down Payment
It is always a good idea to put at least 5% of your loan amount as a down payment. It is important to learn that mortgage programs like USDA and FHA loans have different requirements in terms of downpayment, therefore you may be able to put it down even less. You can discuss with your mortgage banker if you have any questions related to down payment requirements or learn about how much money you have to save to make a down payment. Local and state government housing agencies offer down payment assistance programs which are worth considering if you need help. Help offered by such departments may vary by city, state, and county and are subject to income restrictions. This help is designed to assist low or moderate-income families gain access to quick and affordable down payment options.
3. Using Alternatives To Purchase A Single-Family Home
The idea to purchase a single-family home may seem daunting however there are still options out there for single mothers. For instance, you can decide whether a townhome or a condo will be the right choice for you. Mortgage grants for single moms apply to townhomes and condominiums so do not let the idea of home management stop you from fulfilling the dream of home ownership. The perfect home for every unique family out there is waiting to be discovered.
4. Look At Affordable Loan Options
A lot of low-income home buyer programs are available that do not limit single parents and have family income limits which make it easy for single mothers with a limited range of income to qualify. The United States Department Of Agriculture, as well as the Federal Housing Administration, has programs that assist low-income home buyers to purchase a home. Low-income loan programs such as USDA Rural Development loans offer direct loans with 0% down and this way single mothers can get home faster without waiting for a long time to save for a down payment.
5. Credit Issues
Single moms who have poor credit scores either because of a divorce or because of a lack of credit history of their own can go for government-backed loan programs such as USDA Rural Development loans, deferred loans that help them to get exemption from the waiting period associated with foreclosure or bankruptcy and are quite flexible on credit. You can create a credit score of your own with the help of alternate resources like monthly obligations including insurance premiums, utility, and rent payments.
It is difficult for single parents to raise their children and pay the bills on time. Purchasing a home on top of it seems to be an impossible feat for low-income single mothers. Many believe that it only takes two sources of income to finance a home. However, this isn’t true. For instance, single moms can make use of down payment assistance and affordable loan programs. In many states, some subsidies or programs assist single parents which fall under specific homebuyer categories. Even though they do not include single parents in the name they include a lot of incredible benefits for home buyers. These benefits are marketed to low-income buyers, first-time home buyers, and rural area home buyers categories. This way you can turn your homeownership dream into reality.