Can A Single Mom Buy A House?
Umm, how about YEEEEEEEEEAAAAAAAAAA!!
If a husband/wife can buy a house, why can’t a single mom?
If a bachelor can buy a house, why can’t a single mom?
If a single woman can buy a house, why can’t a single mom?
The only difference between a single mom and other potential buyers is [presumably] limited resources because of her dependent(s). Other than that, there isn’t anything different about the process. I don’t approach life in a “woe is me because I’m a single mom” mentality, so I’ll address the question to benefit ALL aspiring homeowners.
Got it? Good! Aight, let’s roll…
Buying a house requires 3 things. Yep, that’s it! Just 3 things.
1. Down Payment
2. Assets
3. Good Credit
Well, maybe I’m oversimplifying just a tad. There are many many ways to buy a house if you’re missing any one (or all) of these things, but creative financing has gotten out of control! When you buy your house, I assume you want to keep it without compromising a family meal (lol). So keep in mind, having all three will put you in the most advantageous financial position. Then no one gives a shyt about your marital status or how many rugrats you have anyway. Ha!
Ok, for real. When buying a house, two [income] is always better than one. But doing so on one income is NOT impossible. I just bought my first home in April 2006 and here are a few of Single Ma’s lessons learned along the way:
Have a Vision: What kind of house do you want? Where do you want to live? How do you imagine the neighborhood? What about the schools? Having a vision helps to solidfy what you want. If you can see it, you can achieve it!
I envisioned myself living in a 3 bedroom 2 story single family home. I wanted to stay in the same school district but the housing area was more affluent, thus the prices were through the roof. Location was more important than size or floorplan, so I was determined to make it happen anyway.
Get Ya Money Straight: How much do you want to spend on the house? What monthly payment (principal, interest, taxes, and insurance) can you afford? This may require you to massage your vision so that it’s more aligned with your resources. Don’t think too big. Don’t buy more house than you can afford (even if the bank says you can). Think about the total cost of ownership (i.e. downpayment, closing costs, monthly payment, maintenance, furniture, decorating, etc.).
Most “A” paper loans (good credit/best rates) won’t allow your housing expenses to exceed 28% of your gross income. Other lenders will let you extend yourself up to 45%. Why are their calculations based on your gross income (BEFORE taxes) beats the hell out of me. Most lenders also review your assets and at least 6 months reserve. They want to make sure you can afford the mortgage and have a cushion to sustain yourself after you are in the house.
With that in mind, only you can determine what you can comfortably afford. You know how often you like to eat out, the cost of daycare, how often you shop, get your hair done, when the child support check comes, etc. Figure out your comfort zone and stick to it.
Establish a Goal: Goals keep you focused and grounded. This is your plan to make your vision a reality. When do you want to be in your house? How much can you ‘reasonably’ put aside every pay period? How long is it going to take you to save the downpayment?
Once I became serious about owning a home, I let nothing distract me. Going out with my girlfriends was a thing of the past. Unless we had a potluck house party, they knew to exclude me from the festivities. Single Ma was on a mission and my eye was on the prize. When I finally got into the habit of saving, I started putting aside $1,000/month. I fumbled and back slid here and there, so it took me about 2 years to accomplish my goal.
Get Ya Credit Straight: Bad credit is NOT fabulous! If you have problem credit, I highly recommend getting assistance from a non-profit organization or a reputable firm to get that cleaned up BEFORE entertaining a mortgage. If you’re a DIYer like SingleMa, I’d recommend going over to creditboards.com and poke around a bit. I’ve been a member of that forum since October 2004 and I’m impressed with the level of expertise and industry knowledge available and the FREE information and assistance provided.
I used to be a card carrying member of the bad credit club. It took me a few years to correct my bad spending habits and another few months to clean up the mess I’d made. After my credit was in the competitive range (700+), I was able to approach my lender with confidence and tell them what I wanted instead of them telling me what they could TRY and work out. I made them compete for MY business and the experience was truly liberating!
Research, Research, Research: I know it’s cliche’ but knowledge really is power. There are many professionals involved in the homebuying process who may claim they are working for YOU (i.e. buyer’s agent, mortgage broker, attorney, home inspector, etc.), but no one, I mean NO ONE will look out for your best interest as well as YOU can. I mean, think about it…you’re buying a house (your money going OUT) and they’re earning a living (their money coming IN). We rely on them for their respective areas of expertise, but we must also use our own common sense and business acumen to successfully complete the transaction. Having a keen eye and attention to detail will disclose many (not all) things that could ultimately save you money.
I realize this is a very basic, top level summary to buying a home. However, these are the areas that had the greatest impact on me. I can’t go into detail about all the downpayment assistance programs for low income and/or single parents because I didn’t use them. As previously mentioned, there are many “creative financing” deals out there, but be very careful. Many of them are tailored to benefit the lender, not the borrower.
When all was said and done, I purchased a 3 bedroom/3 story townhome just a few blocks from the neighborhood I originally wanted. My daughter goes to the same school and I can comfortably afford my mortage. It wasn’t a cake walk by any means, but it was certainly worth everything I sacrificed. Would it have been easier with a mate? Umm hell yea. Was I willing to wait for a mate before owning a home? Umm how about NO! If I can do it, you can do it too!
For more information, please see these related posts:
Investing vs. Saving For a Home
Sista Get Your Credit Straight
This is What 2 Years of Saving and Sacrifice is Worth to Me
The 2nd Largest Expense When Buying a House
How to Read a Good Faith Estimate
Peace & Blessings
~SM
This post was written, courtesy of The Budget Fashionista personal finance series, “Being Broke Aint Cute.”
Work to achieve, not to acquire.
And as always, BE FABULOUS!
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I was gonna say- Hey! That’s your Being Broke Ain’t Cute topic! (Ours is saving- funny huh? We have some fun stuff planned! LOL) Love all the resources you gave from your personal experience. You can do anything you put your mind to!
As a fellow (newly) single mom, I think it’s important for us to remember that we’re responsible for providing for our future generation. Why not be like other cultures and have something to pass on other than heart disease?
If we lead by example, our kids will come to view home ownership as the only natural thing to do.
Single Ma! I may not be a parent, but as a single woman, purchasing a house can be daunting for all the reasons you just described. I’m excited to say that I’ll be closing on my first home on the 20th. It took a lot of planning to do this on limited resources, but the result is SO worth it. I followed your homebuying process & am encouraged by your story.
Thanks, Heather
Ma, as you well know, I was raised by a single-ma. We never owned a home when I was a kid, what with her raising three boys and all. And then, she just never really focused on it after we were all grown.
Well, we had this near 90 year old cousin who was one of those rare blacks of her time who owned her own home (in DC) and her husband and siblings had since passed away, so Mom was one of her closest last remaining relatives. And wouldn’t you know it, the sale of Cousin’s home was the bulk of her estate, split between Mom and another cousin. My mom at this point was around 65 herself.
Well, that inheritance allowed Mom to buy herself a nice little ranch-style home (she still lives in the small southern city where I grew up). This was no huge windfall (homes in her town are like $80K for something basic), but it was enough for a good downpayment and establishing an emergency fund. I find it funny how Cousin’s home ownerhip, ultimately made it possible for my Mom to buy a home too - an example of passing resources down to the next generation, though perhaps a bit late.
I never really knew she wanted her own home so badly, until I saw how excited she was to finally get it, even at age 65.
It is a powerful thing, home ownership. Definately worth it.
Hi Single Ma,
Love, love, love, this post! It takes a huge amount of work to get financially ready for your first home. If it is “painless” to get into your first home - watch out! You may be signing up for something that will hurt you later…
I’m with you - why should it be any different for a single mom to buy a house than a working dad with a wife and kids? Both families have one income and dependents, but somehow, women aren’t viewed as capable breadwinners by society the same way that men are. Sigh.
All I’m gonna say is Amen sista! It worked for me and you, it could happen to other single Moms.
You are awesome.
I always wanted a house of my own but I was intimidated by the whole process, mainly because I was a single mom. However, once I did my research and got my money/credit straight everything else really just fell into place. I’ve been living in my home for four years and I know it was the best decision that I ever made!
I’m a single woman and bought my condo in March of this year. The experience actually went quite smoothly. I ended up only bringing $450.00 to the closing and that went towards my home insurance for the year.
I truly feel homeownership is important. In fact, I would rather go out and get some property before I get a nice shiny new car. The key is to NOT buy a house you can’t afford. My mortgage payments and HOA dues were the most important factors. I didn’t budge a $1.00 more than what I knew I could handle and still maintain my life style.
As always, you are fabulous rock star!
I can’t agree with you more on research. It’s true. The more you know the better off you’ll be in this process.
I’m a HUGE fan of the Peter Miller book on mortgages. Let me ask you, what did you read that helped you learn about the homebuying process? The HUD website has stuff for first-time homebuyers and so do a lot of banks. But is there something in particular that sticks out in your mind?
Thank you Single Ma for giving me hope that I can get out of this rut!!
@ prlinbiz - I know how you feel about “saving” so I look forward to reading your antics.
@ summer - I couldn’t have said it better myself. Our culture passes on a lot of bad habits, but you made me chuckle when you said heart disease (although I know it wasn’t meant as a joke). And you’re right, we must lead by example.
@ heather - Hi, welcome, and CONGRATULATIONS!! It makes me happy to know that my story has encouraged you.
@ miguel - I’m so sorry it took your cousin’s death for your mom to be able to own a home. However, even at age 65, that was a major accomplishment. It’s NEVER too late. Most people would have blown the inheritance on…STUFF.
I love reading about your family and upbringing. I wish you would start a blog already!
@ jane - Aww shucks, Miss Jane luvs me y’all! I *know* I’ve done something right now. ha ha I’ve NEVER heard anyone say buying a house was painless. If/when I do, I’d be shocked AND skeptical. There are just too many pieces to the puzzle to go off without a hitch.
@ anon - A single income in a two parent household is perceived as less risky because the stay at home parent can always go to work if things get tight. I agree with you though. Times are changing, but perceptions aren’t changing…fast enough. It takes more people doing the damn thang to show and prove. We’re getting there though.
@ survivin - ^^5
@ chele - And you are fabulous! The process IS intimidating and downright scarey for a first time buyer. Especially one who doesn’t have many role models to show how it’s done. But owning a home is NEVER bad thing if you can afford it. Even with my new construction horror stories, it was still worth it. I love looking around my place and thinking, “this here is MY shyt.” Ha!
@ woman on the move - I take it you did a $0 down and rolled in the closing. Good deal if the market keeps your equity positive. On the plus side, that leaves more cash flow for other things. Most importantly, you can comfortably afford it and that’s what matters.
@ mapgirl - Never been called a rock star before, but umm, ok. LOL To be honest, I didn’t read any books on homebuying. I attended a homebuying seminar offered by my job but it was useless. I’m an internet junkie. When I’m looking for information, I become obsessed with learning and the internet is a gold mine.
I spent a lot of time on creditboards.com. They have a mortage forum with mortgage industry professionals who answer questions, critique your GFEs from other lenders, give feedback, recommend other resources, etc. all for free with no sales pressure.
I also spent a lot of time on bankrate.com, other message boards, talking to friends who were 2nd/3rd time homebuyers with real life experience, and performed a lot of market research to compare/contrast different lenders and multiple loan arrangements.
Bottom line, when I’m thirsty for information, I don’t limit myself to any one resource.
@ tjeanise - Your comment really touched my heart. Thank YOU but you’re also very welcome.
New pic? Very pretty and so fabulous!
Thanks Ma. It was definately Cousin’s time to go, she had a long, full life.
Truth be told, I don’t really think it’s the best idea for my mom to have her own home right now, as she is quite dependent on others to take care of maintenance and I don’t live nearby.
But, she gets a surprising amount of satisfaction from owning. I recently asked her if she would consider moving into a rental to avoid the maintenance hassle and she was decidedly negative on that idea.
Sometimes I want to sell my own home and rent cause I don’t much enjoy the maintenance and upkeep stuff, and finding good help is tough too. But, you know if I didn’t have this house to spend my paycheck on, I’d probably blow a lot more money on frivolous things. So, the house is a way of forced fiscal conservatism. This is why I think owning is a major key to NW building.
After reading this post, I was determined - as a single mom - to buy a home.
Never in a million years would I have guessed that homeownership for me was a possiblitly, especially WITHOUT a husband! On September 14, 2007, I closed on my home, which I purchased for $110,200, which has $25,000 dollars in equity and, with some minor cosmetic repairs, could be appraised higher to give me $32,000 in equity. Almost instantly, I have net worth!
My new goal is to pay off my car, then my student loans and, hopefully, my house within 10-15 years.
Thanks for blogging - keep inspiring more single mothers become financially fit.