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Buying a Home as a Single Person: What You Need to Know
Buying a home used to be associated with getting married or starting a family. But, that isn’t the case anymore. Marriage rates are declining in the U.S. and people are choosing to stay single longer. So, you certainly don’t have to be in a relationship to buy a home. Homeownership has long been a part of the American dream, whether you’re a couple or not.
You can obtain that dream on your own, and make a solid investment while you’re at it.
That being said, buying a home on your own can feel a bit intimidating, especially if you’re doing it for the first time. How do you know if you’re ready? What does the market look like? What should you know before you even make an offer?
Let’s cover a few things you should know before you buy a home as a single person. The more informed you are about the process and what to expect, the easier it will be. If you find that it’s the right option for you, you’ll be moving into a place of your own in no time.
Are You Ready to Own?
It’s not uncommon for single individuals to choose to rent over buying a house, and it has its benefits. You don’t have maintenance issues to worry about on your own, and you’re not “tied down” to one place. But, there are so many additional benefits to owning your own home that often outweigh the pros of renting. Some of those benefits include:
- It’s a good long-term investment
- You’ll build equity
- Tax perks
- More privacy
- Greater stability
You can also put more into a home you buy, making upgrades that could increase its value if you ever decide to sell.
Once you’ve decided that you want to buy, your next question should be if you’re truly ready. Take a look at your financial situation. Crunch the numbers and be realistic about your budget. If buying a home is something you truly want, you might have to cut back elsewhere (including that morning coffee run for a $5 latte). In addition to thinning out your expenses, consider getting a roommate while you save up, or even moving back home with your parents for a few months, if possible.
In addition to knowing if you can afford it, it’s also important to know whether you can handle the everyday responsibilities of a home. If there are any maintenance issues, they fall on you. Emergency repairs? That’s on you, too. You can be as prepared as possible, and the unexpected can still occur at any time. Make sure you’re ready for that before you commit to anything.
Getting What You Need
You’re officially ready to start house hunting and eventually make an offer. But, do you have everything you need to get started? Even if you know your budget and how much you’re willing to spend, there are a few things you’ll need to move the process along:
- A real estate agent
- A lender
- A real estate lawyer
It’s also important to make sure you qualify for a loan. Having a good lender to work with will help, but you can figure things out ahead of time and make life easier on yourself. Conventional down payments on a home are 20%. If you’ve figured out your budget and don’t have that kind of money, don’t stress. You may qualify for an FHA loan if you have a decent credit score and you can verify that you’ve been consecutively employed over the last two years.
Getting organized before you start the process will make things less complicated for you. In the end, when you finally make an offer and finalize the buying process, you’ll be more prepared to deal with the pile of paperwork that follows because you’ve done so much leg work already.
Don’t Buy “Too Much House”
Some people say single people should look for homes that are attractive to married couples and families. Why? Well, you might decide to start one of your own someday. Beyond that, though, family-style homes are usually more desirable. You may be able to eventually sell your house for a profit.
But, a larger home may not be within your budget right now, and that’s okay. There are some risks to buying “too much house.” You won’t have much equity, your payment could be eating up too much of your income, and you might not be able to afford to keep up with general maintenance. If that’s the case, it’s unlikely the house will ever be in good enough shape to upsell anyway.
Buying a house you can afford is crucial. While staying within your current budget is smart, you can always choose to take on a side gig to earn extra money. You can earn money freelancing through sites like Upwork, Elance, or SimplyHired and work as much or as little as you want to bring in extra income every month. Freelancing has its risks, of course, since there’s no way to determine how much you’ll make. But, if you have a “dream home” in mind and are willing to work harder to afford it, a side hustle is a great way to do it.
Don’t let the concerns over buying a home for the first time consume you. It can be a lot of work, but it’s well worth it, in the end. Keep these ideas and tips in mind as you go through the process, and you can be confident in every step of the buying process.