Buying Your First Home As A Single Woman

Buying Your First Home As A Single Woman

24 percent of properties in Australia are owned by a sole female. So, if you're a woman who has never married or is divorced/separated/widowed, do not let the idea of buying a home sound impossible to you.


It's true that single moms are balancing many things at once. They're not only providing a living for the family, but are also being the primary caregiver of their children. All of this means a mountain of responsibilities, challenges, and of course, financial restraints. 


But, you can still buy a house. With a little research and math, you can fulfill the dream of house ownership and secure your future. Many single women have done that, and so can you.


Read more to learn exactly how!

Research About The Homebuying Process 

As a first-time buyer, the homebuying process can seem a bit too overwhelming and confusing. It's why you should take out some time and research all about it. 


Your best source for this is the internet. There are bulks of detailed articles and guides available online. You'll even find free courses that help you familiarize yourself with the core concepts and vocabulary related to homeownership.


However, if time's a bit short for you, here are some key terms you should be familiar with:


  • Down payment. This is the initial amount of cash that you have to pay for a home. It is usually 20 percent of the total house value.


  • Preapproval or prequalification. This is the process where a lender approves your eligibility for loans based on your financial conditions and records. Note that it's not an agreement to lend the money.


  • Inspection. This is where experts conduct a thorough examination of the house to find defects and problems. Although it's optional, a home inspection can prevent you from overspending on a house. 


  • Mortgage points. This is the amount given to the lender for lowering the interest rates on the mortgage. Only some lenders offer this option at the time of closing.


  • Underwriting. This is when the lender inspects the submitted documents to approve the loan.


  • Closing. This is the final part where you sign all the documents and finalize the agreement. 

Figure Out Your Needs 

Everyone has a different lifestyle with different needs. So, before buying a home, consider what you really want in the new house.


Do you want it to be near your workplace or other family members? Should it have two bedrooms or five? What facilities and amenities would you like to see in the neighborhood?


Think about these questions to come up with an ideal home in your mind. Remember, your purpose is to find a home that fits your needs and lifestyle perfectly, not the other way round!

Make A Detailed Budget 

Buying a home is a big commitment. You should be aware of what you can afford before getting stuck in another financial crisis. So, once you've figured out what you want, begin working on your finances. 


Calculate your annual income, expenses, and savings. Do not include debts, as these scary figures can be paid off later. Many single moms, who had thousands worth of student loans to repay, managed to buy a home.


How? They focused on the current figures! 


Of course, this does not mean you should stretch yourself completely thin. If you're bound to pay debt installments, do consider it and decide whether buying a home is possible.


Now, with your financial situation clear, choose a mortgage plan that fits your needs. 


Mortgages refer to long-term loans that allow you to purchase high-value properties easily. You'll have to make a down payment (of 3 to 20%) and then pay the rest of the home price in monthly installments. You can click here to find out how much you'll have to repay on a particular mortgage.

Consider Home Loan Assistance Programs

Sometimes, even paying the initial amount for a house is not possible. You may not have enough savings or annual income to pay it from your pocket. But, fret not because many home loan assistance programs are available. Following are a few examples, and you'll find some variation of these programs for your locality. 

FHA Home Loans

The Federal Housing Authority's home loan program is a good choice for first-time buyers. It's specifically designed for people who have never owned a property or haven't purchased one in the past 3 years.


You can get up to 90% loan regardless of your income. However, the down payment should be a minimum of 3.5%. Also, your credit score must be at least 500 (90% loan) or 580 (96.5% loan). 

VA Loans

Single moms who have previously served in the army and now are veterans can benefit from the VA loans. These dedicated programs are simple and easy.


You do not need to fulfill minimum down payment or private mortgage insurance requirements. Plus, the interest rates are comparatively low. 

Rural Housing Development Loans

The rural housing development loans (RHS) work through the government. These are government-secured loans that help you buy homes in the countryside or less-developed areas. 


Its biggest benefit is safety. There's no need of finding the right lender as the government will make all the arrangements for you. There are no scams and frauds either.


However, there are strict eligibility criteria for this program. You cannot take a loan for a property that you intend to rent out or leave unoccupied. You can also not purchase a home larger than your family needs.

HUD HomeOwnership Counseling & Vouchers

HUD is the short form for the department of House and Urban Development. It offers a home voucher program where you can select a housing unit from the participating owners. The government then pays subsidies to the homeowner.


You have to pay the difference between the rent charged by the owner and the subsidy. But, only people with really low incomes can apply for the program. HUD also offers monthly financial assistance and free/low-cost services to participants.  

Check Your Credit Score 

Finally, you must have a good credit score to secure a home loan. A credit score refers to an indicator used to estimate the likeliness of debt repayments. It is based on your previous financial records and history. So, check your score to see whether you're eligible for home loans. 

Many banks, organizations, and even independent lenders will ask for your credit score. If it's poor (less than 500), you may not get a loan easily. However, it's possible to  improve it and then apply for successful results. 


You can do that by examining your credit reports and disputing errors. Making on-time payments also helps boost the score. 


Also be sure to check out what Government grants you may be entitled in. Homebuyers across different Australian States and Territories are subject to different requirements as well as application procedures. To find out more, check out how Joust explains home owner grants in QLD for first time buyers.






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Unsplash @avinaim