The stereotype of the single person doesn’t usually come with a home. We tend to look at single individuals and see them renting an apartment. And there’s no shame in that. Renting is typically much cheaper and more manageable in the short term.
Yet some people still dream of owning a home of their own, even if they live in it by themselves. In fact, more than 25 percent of homebuyers are single. The goal of ownership isn’t unrealistic, but it does take more work and planning than if they pursued it with a partner.
Follow these four steps and you can own a home by yourself, as well as the lawn, garden, porch or whatever other facets of a house that drive you. It won’t be easy but it will certainly be manageable.
First, it’s essential to make sure that a home is the wisest financial option that you can make. This isn’t calling your income status into question; even the most well-situated mover could find that circumstances simply make renting a more promising option, at least for the short term. And the “short term” might be the exact reason you opt for an apartment or townhome instead of buying outright.
Can you guarantee that you’ll be in that home five to seven years down the line? This is a question that should be asked of anyone looking to buy a home, not just those who file their taxes as “single.” Moving costs, closing costs…these are fees that you’ll never get back. Make sure they’re worth it. If your job placement or the local economy isn’t stable, don’t be sure that your home will be, either.
This question is even more pertinent depending on what kind of single you are. Is marriage a possibility somewhere down the line, preferably sooner than later? If so, make sure your home will accommodate a spouse and potentially children. Otherwise you’ll be moving before a the price of a home is worthwhile.
There’s no reason why buying single will result in a larger down payment. But the nature of the purchase will behoove a single buyer to pay more money forward.
Financial experts recommend individual buyers pay at least 20 percent toward a down payment. This is to make it less likely that you’ll be “underwater” if you’re forced to ditch the home sooner than you would have expected. In other words, you won’t owe more than the value of the home if things don’t go according to plan.
That’s a lot of money when you sign. A way to make sure that you’ll be ready for the initial investment include arranging a recurring transfer to a savings account (you can’t spend the money you don’t see). Or you can live with a will loved one in the short term. Moving in with parents or siblings might crimp your style for a bit but it will be worthwhile in the rent you can otherwise put toward that down payment.
If preparing for the big down payment wasn’t daunting enough, responsibly transitioning to the home life requires you being ready for the future. It’s not responsible to spend a large amount of money on a home if it comes at the cost of retirement or other future plans.
A good rule-of-thumb is to have at least six months of living expenses in your bank account at all times. This will make sure that when the unexpected comes (and the unexpected will come when you own a home), you won’t be up the creek without a paddle. These costs could come in the form of repairs or other maintenance costs.
Gathering these safety funds happens in the same way as saving for that deposit: savings accounts and spending less now.
Make sure you’ve got the right people and knowledge on your side when you enter the housing market. This will include finding reputable real estate agents and lenders who can guide you in the right direction in terms of both finding the right home, as well as letting you know your mortgage options when you make a move to buy.
Simultaneously, build up your know-how so that you’re ready to own a home. The aforementioned maintenance and repair—which normally come with renting—can quickly skyrocket when it’s your home. If you have the skillset to make these repairs yourself instead of bringing in experts, you can save yourself hundreds, if not thousands, in the long run.
Buying a home is within reach if you’re a single buyer. Use this post to make sure that you do everything you make your dream a reality.