Making one of the largest purchases in your life — your own home — is exciting and overwhelming all at once.
There’s figuring out your budget, wading through paperwork, and the anticipation of whether your offer will be accepted by the seller. It’s a lot.
But what if you’re buying a home on your own? You have to deal with that roller-coaster of emotions without the moral support of a co-borrower. And figuring out how to buy a house as a single homebuyer can come with a steep learning curve.
The truth is, as long as you take it step by step and keep your cool during the more stressful moments (and trust us, they will come), buying a home on your own is 100% achievable.
Educate yourself on what it takes to buy a home before you start the process. You’ll be leaps and bounds ahead of other would-be buyers.
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How to buy a home on your own
Buying a home on your own is achievable, though it helps to make sure your finances are in tip-top shape and you’ve assembled a support team before you apply for a mortgage.
Here are some ways to set yourself up for success:
Check your credit
Your credit score is a significant factor in qualifying for a mortgage, and it also affects your interest rate. Since you won’t have a co-borrower, having a high score on your own can increase your chances of getting approved and receiving competitive rates.
But don’t just check your credit score anywhere. A free app or budgeting program will likely give you an inflated score compared to what a lender would pull. Still, it’s good to have an idea of your score so you can raise it before you apply for a loan. Paying down high balances and ensuring that all bills are paid on time can be key in boosting your score.
Request your free credit reports from the three credit reporting bureaus (TransUnion, Equifax, and Experian) through annualcreditreport.com and look them over for any inaccuracies or signs of fraud. If you spot any issues, file a dispute with the bureaus to have them corrected.
Pay down as much debt as possible
Lenders look at what’s called a debt-to-income ratio (DTI) to determine whether you qualify you for a loan, and for how much. The DTI is your total monthly debts as a percentage of your gross monthly income. For instance, if you make $5,000 per month, having $2,500 per month in debt payments and future housing costs would put you at 50% DTI. That’s a relatively high DTI, but requirements vary based on different loan programs, and in some cases, a lender can approve you with a DTI at this level, or even higher. However, the lower your DTI, the more loan options — and homebuying power — you’re likely to have. Aim for a DTI of 45% or less, particularly if you hope to take out a conventional loan.
Figure out how much you can afford
Going into the homebuying process with a clear idea of what you can afford will prevent you from being stretched too thin financially. How much are you paying in rent now? Is that number comfortable for you, or do you find yourself feeling pinched financially month to month?
Think about how much you want to pay per month all in — meaning your principal, interest, property taxes, and homeowners insurance. These factors are known as PITI, and they’re all part of your monthly housing costs. So when you’re looking at homes, remember that it’s not just about the list price, it’s about all of the associated expenses.
A lender will estimate how much you can borrow when you get preapproved, but it helps to know your target house payment before you apply. That way, even if you’re approved for a much higher amount, you’ll know the price range you’re comfortable with and can focus your home search on those affordable properties.
Shop around with several lenders
Comparing rates and terms with multiple lenders gives you confidence that you’re choosing the best loan for your needs. Plus, not all lenders offer the same products such as down payment assistance programs or jumbo loans, so it’s a good idea to find out all of your options.
Asking for multiple quotes also gives you a glimpse into each company and whether you’d want to work with them. Do they respond quickly to your questions? Are they patient and helpful? Learning a bit about each lender will give you confidence that you’ve picked the right one.
Related reading: Ask a Lender: What’s Your Average Mortgage Closing Time?
Interview real estate agents
Finding a real estate professional you trust and who understands and respects your needs is key. Ask trusted friends and family members for recommendations, and then schedule interviews with a few different agents. Come prepared with a list of questions such as how long they’ve been working in this particular real estate market.
Ideally, your real estate agent will also be familiar with different loan programs, and will have a sense of which properties will be approved for the type of mortgage you’re using. For instance, FHA loans have strict appraisal requirements and USDA loans only apply in certain areas. If you are buying with either of those, you want an agent who knows which houses are likely to qualify under the program rules.
You may also want to assemble a support team as you head into the process. Although buying a home can be thrilling and rewarding, it’s also emotionally intense. Having a go-to person to check out properties with you, or who you can ask for logistical help, can make it easier.
For instance, if you can’t take off work to attend your home inspection, tag in a trusted friend or relative who can be there to ask questions and take a closer look at the property for you. Provide them with a list and let them know your top concerns about the house so they can help you get the answers you need.
A note on preapproval
Getting preapproved is really the first step in applying for a mortgage. A preapproval provides critical information to you and to sellers: how much you’ll likely be able to borrow and that a lender has verified your finances and sees you as a serious buyer.
Preapprovals can take a few days to process, since you may voluntarily submit financial documents, such as pay stubs, tax returns, and proof of employment. But when you get preapproved, you can confidently move forward, knowing that your finances have been vetted and you’re qualified to buy a home.
Some real estate agents and sellers will not even show you houses if you don’t have a preapproval letter, so if you’re ready to buy, you want to get preapproved ASAP.
Now, you’ve probably seen prequalifications mentioned by different lenders as well. Prequalifications tend to happen a lot faster, which is convenient, but they aren’t underwritten — that means a lender has not verified your financial information and the prequalification you receive may be less accurate than with a preapproval. There could be a greater chance that when you get an offer accepted and move forward with the loan application, a lender will spot an issue that causes them to deny the application or approve you for less than you need to close on the home.
So, you are better off with a solid preapproval that tells your real estate agent and prospective sellers that you’re a qualified buyer who can secure the loan needed to purchase a home.
Related reading: How to Buy a House in 11 Steps | 2021 Guide
Know your mortgage options as a single homebuyer
A good lender will be able to pinpoint the right program for you. Still, it’s good to be armed with knowledge beforehand so you can ask questions and get clarity on different options before you move forward.
There are no loan programs just for single homebuyers. The same products are available to single homebuyers as couples who purchase houses together. Lenders will look at your income, credit score, and DTI to determine whether you can afford your monthly payments. It doesn’t matter to them whether you’re buying with a partner or purchasing the house solo. If you can afford the payments and meet the program and lender criteria, there’s nothing stopping you from buying a home on your own.
Following are some mortgage options that might work for you.
Conventional loans are the most common type of mortgage, and they can be a great choice if you qualify. To qualify for a conventional loan, you’ll need a credit score of at least 620 and a DTI of 45% or less. If you have significant savings, you might opt for a 20% down conventional loan, which allows you to avoid the extra cost of private mortgage insurance and may give you access to great mortgage rates. Even if you don’t have a large down payment, but have good credit, you might choose a 3-5% down conventional loan.
These allow just a 3.5% down payment, and that can be from a gift from family or down payment assistance provider. The minimum credit score for an FHA loan with 3.5% down is 580.
Be sure to tell your lender if you have former or current military service history. Eligible servicemembers and veterans have access to this zero-down loan program.
This is another zero-down-payment program that requires you to 1) have a salary at or below 115% of your area’s median income, and 2) be purchasing a home in an eligible “rural” area. But don’t be scared by that term. The program defines many suburban areas outside major metros as “rural”. You might be surprised that the homes you are already looking at are eligible for the USDA home loan.
If you’re buying an expensive home, you may need a loan that is higher than conventional loan limits. These limits vary across the country but range from $548,250 to $822,375 for single-family homes. If you need a larger loan, many mortgage companies, banks, and other lenders offer loan amounts in the millions. You may have to do a little more digging to find a program, but they are readily available from many sources.
5 Tips for finding the right home
Once your finances are in order and you’ve been preapproved, you can start thinking about the type of home you want to buy.
That’s why it’s important to carefully consider what it is you want in a home, and to stick to that list of priorities, especially as you get close to making an offer and emotions start to run high.
1. Consider how much maintenance you’re willing to put in
Any home you buy will require some sort or work, whether that’s mowing the lawn, pest control, or making small repairs. But seriously consider how much upkeep you want to do beyond that. A fixer-upper can be one person’s dream project and another homebuyer’s nightmare, so think long and hard about how hands-on you want to be when it comes to maintaining the home.
2. Don’t be afraid to ask questions
Jennifer Leche, a REALTOR® based in Louisville, Ky., said that real estate professionals are there to answer your questions, so don’t feel like you’re being a bother by voicing any concerns or asking for clarity. If you’re wondering about terms you may be unfamiliar with, such as homeowners association fees or escrow, it’s better to ask now than when you’ve already signed on the dotted line. Besides, this is a major purchase and you’re the one taking out the loan.
3. Look at local amenities
It doesn’t matter if you find a perfect home if it’s in a location that’s really not to your liking. Come up with a list of neighborhood features you want, such as walkability, access to public transportation, grocery and dining options, entertainment, parks and running trails, or any other amenities that are essential for you.
Consider, too, how much you value being near family and friends. For instance, fifty-percent of single women surveyed by the National Association of Realtors (NAR) said proximity to loved ones was a factor in their homebuying decisions. If you want to be close to friends and relatives, look for a neighborhood that offers a sweet spot of being near all your preferred amenities and a convenient drive to the people who are dear to you.
4. Think about the future
While buying a home for your current needs is a good idea, it’s also a good idea to think about your lifestyle goals for the future. Are you currently in a serious relationship (and potentially getting married)? Do you want children someday? Do you travel often for work, or do you anticipate moving in the next five years? All of these factors can influence the type of home you’ll choose.
If you’re in a serious relationship or plan to get married and have children, you might prioritize an extra bedroom that serves as an office or den now but can easily be converted to a baby’s room.
If you travel often for work, you might want a smaller home that requires less maintenance since you don’t want to spend all your downtime working on repairs and you’re frequently on the road anyway.
Or, if you expect to be transferred to a new city in a few years, you might also opt for a smaller place. That way, you can minimize your monthly payments while building equity and saving to buy a larger home when you relocate.
Looking down that road, you may opt to keep the first house as an investment property when you move so you can earn rental income even though you’ll have moved into a new home.
5. Ask trusted friends to come view homes with you
When blogger and money coach Cara Palmer was looking for her home, she asked a few friends to see houses with her. She knew they were there for her best interest and shared their advice on flaws and potential downsides to each home.
Having an extra set of eyes on a property is helpful, since you may not notice certain details that could create costly challenges, especially if you’re smitten with the property. Ideally, you’ll bring someone who has experience in construction or homebuying. But even if all your friends are still in the pre-homeownership stage as well, their input can still be valuable. They’re more objective than you, and they can play devil’s advocate to make sure you’re seeing the full picture of a home, rather than getting caught up in one or two nice-to-have features.
The best types of properties for single homebuyers
Most single homebuyers opt for a condo or townhome, according to NAR, but there is no one-size-fits-all homebuying plan. A busy young professional who values a short commute and proximity to social opportunities is probably not going to want the same type of home as a single parent who wants a yard for their kids.
Your best course of action is to narrow down how much you can comfortably afford and find a property within that range that suits your lifestyle. A condo may be a great fit for the young professional, since they may not have time to do a lot of upkeep and is happy to have the condo association take care of it.
The point is, the best type of property is the one that meets your needs and that makes you excited about becoming a homeowner.
Thinking about buying a home on your own? You’re not alone.
According to a study conducted by the National Association of Realtors® (NAR), 19% of first-time homebuyers in 2020 were single females and 11% were single men.
A LendingTree study found that singles own nearly nine million homes in the U.S. In the country’s 50 largest metropolitan areas, single women own about 5.2 million homes and men own roughly 3.6 million.
That doesn’t mean single homebuyers don’t face challenges in the homebuying market, however. Women in particular can face steep hurdles, including competition from single men who may have higher incomes and married couples who have more buying power due to joint income. Single female homebuyers had the lowest income of all homebuying groups, at $65,000, according to NAR data from 2019.
But man or woman, homebuying can be tough, especially in the current market. That’s why paying down debt, saving for a down payment, and raising your credit score are so crucial. A strong, budget-savvy solo buyer can beat out couples if they have solid income and their finances are in order.
How student loans affect single homebuyers
Student loan debt can also pose a challenge to single homebuyers. The American Association of University Women (AAUW) reported that women hold two-thirds of student loan debt in the U.S., though plenty of men carry student debt as well. The mean student debt load among women graduates ranges from $29,611 for those who attended public four-year universities, to $42,778 for those who attended for-profit four-year schools.
Of course, that’s just the mean — some graduates carry substantially higher debts.
Black women are the most adversely affected group in the student debt crisis, with a mean of $37,558 borrowed. White women have the next highest mean, at $31,346, though this was still lower than the mean among Black men, which is $35,665. The mean debt load for men across ethnic groups ranged from $25,507 to $31,346.
Managing debt payments, especially immediately after graduation, can seriously slow down one’s homebuying abilities. The shock of student loan payments may make it difficult for recent graduates to cover their everyday expenses, let alone save up money for a down payment, closing costs, and all of the other expenses that arise with homeownership.
Nevertheless, homebuyers persist
The journey to homeownership doesn’t take place in a day, or even in a month. It can be challenging to save for a down payment when you’re buying a home solo, but it’s certainly doable. Creating a budget and setting even small amounts aside add up over time.
And you can work on your credit score by paying all of your bills on time and keeping your balances low. Buying a home doesn’t require you to make a high income. Focusing on smart budgeting and saving will get you a long way toward qualifying for a mortgage.
Is it harder to get a mortgage as a single person?
Not necessarily. Buying a home with a co-borrower can increase your purchasing power — how much you can afford — if you both earn solid incomes and have great credit.
But a co-borrower doesn’t always improve your chances. In fact, some couples decide to have one person apply for the mortgage if the other has poor credit or low or inconsistent income. So you don’t need to buy a home with someone else. If you have solid credit and steady income, your odds of approval are good on your own.
Leche has seen plenty of nontraditional situations in which single people have bought homes. She’s helped single mothers purchase their first homes and widows who wanted to downsize.
Experienced real estate agents have probably seen a myriad of situations and know how to get creative when it comes to finding you the right home. The key is to work with a real estate agent who has the capability to meet your needs.
“It’s important to ask around and find a Realtor that will help [buyers] seek out solutions that are a bit out of the box if necessary,” Leche says.
Getting a mortgage as a single person will depend on your individual financial situation. There are numerous loan programs that can help you buy a house, it just depends on your credit score, income, location, and debt-to-income ratio (DTI).
Palmer purchased a home after her divorce and didn’t feel it was difficult because she had a steady income and good credit.
“My only issue was that the seller tried to back out at the last minute,” she said. “Otherwise, my lender was there every step of the way and helped me pick out the best type of mortgage based on what would work with my financial situation, which ended up being a conventional loan.”
What if I have less-than-perfect credit?
And if your credit isn’t great? You still have a shot. FHA loans with a 3.5% down payment are available to qualified borrowers with credit scores as low as 580. Making a lower down payment also makes sense, especially if you want to free up your cash for other purposes, like having an emergency fund.
Sarah Wilson, blogger at Budget Girl, used a FHA loan to purchase a duplex — she lived in one unit and rented out the other. Her total closing costs came to around $13,000 for her $230,000 home.
“I had more money saved, but buying during the pandemic made me want to have more in cash reserves,” she said. “It felt a little intimidating to make such a large purchase, but I had a great loan officer who explained each step of the process and didn’t blink when I said it would just be me on the loan.”
Whether you qualify for a loan will depend on your credit score, income, debt-to-income ratio, and how much you have available for a down payment.
Depending on your income and whether you have dependent children, your finances may be a little tighter, especially when it comes to saving up a down payment.
But it is doable, especially if you qualify for down payment and closing cost assistance programs or choose a loan program that allows you to use gift funds toward those upfront costs.
Legal protections for single women homebuyers
A lender can deny your application based on your finances, as they have to verify that you can afford to make a monthly mortgage payment. But they cannot discriminate against you because you are applying as a single borrower, you are a single parent, or because you are pregnant.
In the past, lenders denied women in particular credit for these very reasons. They could deny single women’s applications outright and would discount married women’s documented income — particularly if they were of childbearing age, according to the Consumer Financial Protection Bureau (CFPB).
Since then, laws were enacted to protect all homebuyers’ rights. The Equal Credit Opportunity Act (ECOA) forbids companies from denying loans based on sex, marital status, race, color, national origin, age, religion, or whether you receive public assistance income. Additionally, the Fair Housing Act (FHAct) prohibits discrimination based on family status or disability.
That means they cannot refuse financing or charge higher interest rates based on these factors.
How to buy a house as a single person FAQs
Is it possible for a single person to buy a house?
Yes. As long as you have a qualifying credit score, steady income, and meet lender and loan program criteria, you may be approved for a mortgage. Lenders and sellers cannot discriminate against you based on marital or family status, meaning you can’t be denied a loan simply because you are single or are a single parent.
You can buy a house regardless of your marital status. Lenders will look at your credit score, debt-to-income ratio, income, and other financial factors to determine whether you qualify for a loan. But they will not approve or deny a loan based on whether you’re single.
A single person can afford a house based on their income and overall financial profile. There are a number of different loan programs for borrowers at a range of income levels and credit scores, and a lender can explain the options that may be right for your circumstances when you get preapproved.
You’ve got this
Buying a house when you’re single may seem intimidating at times, but you’ve got this.
Single people buy homes on their own all the time, and no one knows everything going into the process. Work with an experienced lender and real estate agent, rally your support system, and focus on what you can afford and what you need in a home. And trust in yourself that you will make the right decisions from there.
Fairway is not affiliated with any government agencies. These materials are not from the VA, HUD, FHA, USDA, or RD, and were not approved by a government agency.
Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.