9 Tips for Single Parents Who Want to Buy a Home

Mom and daughter on roller skates

As a single mom or dad, it’s easy to think homeownership is out of reach.

To buy a house, you’d need to scrimp and save for that down payment (plus closing costs) — but most of the time, you’re just trying to keep your head above water. Throw in that your kids require most of your time and energy, and the chances seem even slimmer.

Fortunately, all hope isn’t lost. In fact, according to Redfin, about a third of single mothers own a home. It’s even higher in places like McAllen, Texas; Salt Lake City; and Grand Rapids, Michigan, where over 40% of single moms are homeowners.

Are you looking to join their ranks and buy a home yourself? These tips can help:

1. Know what local assistance programs are available. 

Look up your state and city housing agencies and see what home buying assistance programs might be out there. Many municipalities offer help with closing costs, down payments, and even your mortgage if you meet certain income requirements. These can make buying a house significantly more affordable.

2. Consider talking to a housing counselor.

The Department of Housing and Urban Development offers free counseling for Americans looking to buy a home. They can help you learn more about the buying process, locate assistance programs you might be eligible for, or even walk you through getting a mortgage.

3. Buy a house in a more rural neighborhood.

Steer clear of super urban areas, and look to slightly more rural communities for your home instead. Doing so may allow you to utilize a USDA loan, which requires zero down payment upfront. Use this map to see what areas are USDA-eligible in your region.

4. Shop around.

Every lender is different, offering different mortgage products, at different rates, and with different terms. It’s important to shop around if you want to find the absolute best one for your budget and needs. (Experts recommend getting at least three to be safe).

5. Negotiate where you can.

Don’t be afraid to negotiate. On your mortgage loan estimate, you’ll see a “services you can shop for section.” Use this as a guide and shop around for these services as well. You can often find lower prices than the ones your lender is recommending.

You can also negotiate with your agent (ask for a lower commission or find a discount real estate agent) and your home’s seller. Haggle on listing price, get them to include repair credits or closing costs, or even just ask for a home warranty.

6. Look beyond traditional listings.

If you’re really tight on cash, get creative with how you source home listings. Instead of turning to just Realtor.com or Zillow, check out HUD homes or bank-owned properties, which are often sold at bargain-basement prices. These are usually listed on the bank’s website.

You can also check out foreclosure listing sites (RealtyTrac, Auction.com), and consider government-owned properties like those currently owned by the IRS, the Department of Veterans Affairs, the USDA, and the U.S. Marshals Service. Freddie Mac and Fannie Mae both own homes you can buy, too.

7. Improve your credit before starting.

Take steps to boost your credit score before moving to buy a home. Pay down some debts, settle any late accounts, and get any errors removed from your credit report.

The better your credit is, the more affordable your home purchase will be. It can mean a lower interest rate, which may equate to a lower monthly payment and less paid in interest over time. It also can mean more favorable loan terms and sometimes lower down payment requirements, too.  In some states, credit scores are also used to set insurance rates — and a high score can mean big savings on those premiums as well.

8. Think beyond the mortgage payment when setting your budget.

Don’t just determine what mortgage payment you can afford and work backward. The truth is, buying a home comes with many more costs than just your monthly payment. Upfront, you have things like your down payment, closing costs, home inspection, moving expenses, furniture, and more, and on a monthly basis, you’ll also have insurance, maintenance, and utilities. You can’t forget annual charges like your property taxes and HOA dues, either.

9. Wait just one year more.

Once you’ve decided to buy a home, consider waiting just one more year in order to get your financial ducks in a row. In addition to improving your credit score, you can start getting more aggressive about your savings, hopefully stowing away more for your down payment, closing costs, moving expenses, and maintenance/repair fund. Who knows: You may just get a raise by then, too.

Need Help Buying Your Family a Home?

If you’re considering buying a home as a single parent, you’re not alone — and it’s probably easier than you think. Need help understanding the mortgage process? Ready to get pre-approved for your loan so you can start shopping for a house? We’re here to help. Get in touch with Embrace Home Loans today, and we’ll guide the way.

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