As the economy has changed, you may have noticed that it is more and more difficult to acquire any sort of credit, be it credit card, overdraft protection, or even a loan. Mortgage lending is no exception, and is even more unattainable, requiring excellent credit and a substantial deposit. As such, young single people are often dissuaded from homeownership.
As real estate expert Jason Hartman knows, this doesn’t have to be the case. While it may be more difficult for a one income family to purchase a house, it isn’t impossible. Lenders look for first time buyers because they’re often an untapped market capable of boosting the real estate market. This includes single income households.
To increase your chances of qualifying for home ownership, there are a few things you can do. First, save a significant amount of money (20% of a property’s value) to put toward a down payment. If you have savings, this might be a good reason to tap it. Next, check your credit to make sure that it is excellent. If not, take steps to improve this score and your chances of qualifying for a mortgage. Use a free mortgage calculator to help figure out how much you’ll be able to afford to borrow and payback.
You should also spend time researching your specific area and develop a strategy that appeals to lenders in your own state or community. It’s important to approach everything (especially something as significant as home buying) with an educated and open mind. If you find that the area you had in mind is on the expensive side, consider relocation. The advantage of being a one income household is that you’re likely one person—this might be a great chance to move and explore areas that are more affordable. And when you outgrow that piece of real estate, you can flex your property muscle as a landlord by renting it out and earning money for your next purchase!
If you’ve been fiscally responsible, there’s no reason that being a one income family should limit your ability to own a home. The average age for home ownership is rising—in the United States, it is currently at 34, which is significantly higher than years past. Though you may receive negative responses from people who think you’re unable to get a mortgage, pay them no attention—this is 2014, and it’s your year! (We can tell.)
The Young Wealth Team