Thrifty Thinking: Home Buying as a Single-Parent

Buying a home is an exciting time, but can come with a lot of challenges—especially if you’re a single parent relying on one household income. Single parents don’t have the luxury of a two-person household and when it comes to buying a home, two incomes and credit reports increases your chances of qualifying for a good mortgage. 

Nonetheless, with the right knowledge and resources, it is possible for single moms and dads to reach their goal of homeownership even on a single income. If you’re a single parent looking to enter the home buying market, here are a few tips to get you started: 

1. Look at your state’s affordability programs 

Assistance programs for homebuyers are available and the local and state level. These programs can help with down payment costs, closing costs and other fees in the home buying process. 

2. Apply for an FHA loan

Since FHA loans require a smaller down payment and have more relaxed qualifications than traditional loans, this makes it perfect for single parents who only have one income. FHA loans require a 3.5% down payment with a minimum credit score of 580. 

3. Protect your income 

Since single parents usually rely on one source of income, it’s always a good idea to protect the income you have if you’re able. Getting income protection insurance can help pay for the cost of your mortgage and other monthly bills should an unexpected event occur and your income is disrupted. Since lenders sometimes ask to see emergency savings to prove you’d be able to continue making your payments if you lose your income, having income protection will show them you will still be able to service the loan should anything happen. 

4. Consider a co-borrower

To boost your chances of qualifying for a good mortgage, you can get a co-borrower or guarantor on the loan with you. The lender will then look at their credit, income and assets in addition to yours, which may increase your chances of getting a mortgage at a good rate. If you’re worried your income is too low or your credit score isn’t where it should be, having a co-borrower can help. 

For more tips on how to reach your goal of homeownership as a single parent, check out the visual guide created by FHA Loans below: 

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