Home-buying trends have changed over the last decade, and in today’s new market, more single homebuyers are entering the real estate market than ever before. And, single women have now outpaced single men as a percentage of homebuyers—a whopping 21 percent of all new home purchases are credited to single women. Single men and women often want to be closer to where the action is: great restaurants, nightlife, theaters, movies, sporting events, shopping, etc.
Know What You Can Afford
According to the National Association of Realtors’ 2014 Profile of Home Buyers and Sellers, a first-time single buyer spends a median of $135,000.
Affordability is a huge issue. That means not only affording the mortgage but also the taxes, the maintenance, the insurance, and having money set aside for emergencies. The conventional wisdom for a down payment has not changed. Plan to put down 20% for the mortgage—even if you get an excellent mortgage deal, you’ll know you have the funds you require. At the same time, prepare an emergency fund to cover at least six months of all expenses.
Remember that you also have to pay property taxes. Create an expenditure estimate by dividing the tax bill by 12 and set the money aside each month. A spreadsheet can help you figure out all the costs of owning the property. Use a housing calculator to figure out what you can afford.
Buying a home on your own is a fantastic move and great step toward your financial future. Make sure it’s a home you can afford, in case you have an unexpected change in your financial profile. If you lose your job, have a medical emergency, or any other issue that affects your ability to cover your monthly mortgage and expenses, there’s no one else fall back on to cover the financial gap. In other words, when you are on your own, don’t overextend. Buy a home well within your means.
Save on Mortgage Costs with Special Programs
Look at FHA loans if you’re single with only one income. These offer lower interest rates and require lower credit scores to qualify. First-time buyers, and those who haven’t owned a home for three years, can make a down payment as low as 3.5% of the purchase price. FHA loans require more underwriting and more documentation, so lenders may not offer the program at first; be sure to ask. If you do go the FHA route, the Homeowners Armed with Knowledge (HAWK) program will assist with mortgage insurance costs if you go through housing counseling.
Consult Experts and Take Your Time
Purchasing a home is an exciting milestone. It’s also a major investment, and you don’t want emotions clouding your decision. Since home buying is one of the biggest financial decisions most people make, it is a good idea to work with a real estate agent and consult with a financial adviser. Do your research and take your time. When you go to look at homes bring a trusted friend with you who can give you an objective perspective about the property.
Maintenance and Upkeep
Who’s going to mow the grass and trim the hedges? Being the only person in residence also means being the only person responsible for any and all maintenance. A leaky faucet and overgrown lawn won’t take care of themselves. For those single homebuyers who find the idea of maintaining a yard all aspects of a home a bit daunting, condominiums and townhomes—or even smaller homes in new communities—require less exterior maintenance and might be a good option. Don’t buy a home you can’t manage yourself or afford to pay someone else to maintain.
Purchasing a home is a great long-term investment. Remember situations change and you may need to move, because of a new job, for example. It’s important to keep resale value of prospective properties in mind during your search. Be aware of homes and condos that have great visual appeal and will be easy to resell if you need to.
Plan for the Future
As you search for homes, consider what happens if you find a partner, add a child, or have to relocate for a job. Many singles have to move sooner than they expected because their life circumstances changed. Think about that possibility as you’re searching.
You find and buy yourself a comfortable small home or condo, but someday you might add a significant other and possibly even children. Though additional space may not be needed immediately, it’s important to consider potential future plans for a home. Having a spare bedroom, if it’s affordable, is a smart choice.
First Florida Mortgage Can Help
Home ownership is a serious investment and can be a dramatic lifestyle change. Do your research and be assured you’re financially prepared. It’s better to wait than to find yourself over-stretched after committing to the major purchase—buying a home may not be right for everyone at every point in their life.
At First Florida Mortgage, we are a Florida based mortgage company, and specialize in FHA home loans for first time home buyers. FHA loans are a great option for first time home buyers—if this is your first home purchase, a Florida FHA home loan is probably your best option due to the low down payment and easier credit standards. Your down payment can be as low as 3.5% of the purchase price, and closing costs and fees can be covered by the seller. Call First Florida Mortgage today at 1-407-392-4031 or fill out the quick contact form to speak with a Florida FHA loan consultant and get a free good faith estimate.