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Qualifying For A Mortgage As A Single Individual

Qualifying For A Mortgage As A Single Individual

Single mom wanting to buy a home

Single mom wanting to buy a home

Qualifying for a mortgage can be a daunting task for anyone, but it can be particularly challenging for single individuals. Without the added financial support of a partner’s income, it can be challenging to meet the income requirements set by lenders to officially become a homeowner in today’s real estate market. However, being single doesn’t automatically disqualify you from obtaining a mortgage. With a solid understanding of the mortgage application process and a little bit of preparation, you can increase your chances of getting approved for the mortgage you need to purchase your dream home.

Evaluate your income. Are you realistically able to afford a home by yourself? 

Paying your bills without relying on a partner’s income can be challenging. To ensure that you can afford your monthly expenses, it’s essential to assess your income. This includes evaluating your spending like housing costs, phone bills, grocery bills, utilities, leisure expenses, automobile costs, and other expenses. Creating a budget and adhering to it is critical. If you don’t qualify independently, you could seek a co-signer.

Be realistic with what you can afford with only one income coming in. 

In a booming real estate market, it may be challenging to afford the usual cost of living on your own. Loans are available, but it’s crucial to ensure that you can pay them off in the future. To get a mortgage pre-approved as a single individual, you need to find a lender who trusts that you can afford the mortgage, depending on your situation. A mortgage broker can assist you in determining how much you can realistically afford each month on a budget and arrange for your mortgage pre-approval. If a conventional mortgage isn’t feasible, you could also explore alternative lenders. There are even options like using a vendor to take back the mortgage to fund any access that the lender won’t offer you IF the current homeowner is open to the idea. However, when you craft your financing plans make sure they are realistic. You don’t want to deal with the hassle of losing the home shortly after buying it because the financial obligations were just too much to handle on your own. 

If you’ve recently separated, make sure you continue to pay your joint bills

When you have a joint account with your ex, it’s crucial to continue paying your bills. If your name is still on the account, it could impact your credit score in the future which has a direct impact on whether or not you get approved for a mortgage when you apply. Maintaining a healthy credit score is crucial when seeking pre-approval for a mortgage or proving to lenders that you can pay your bills on time. If you need to wait until your financial situation stabilizes a bit before applying for a mortgage that is totally ok!

Even if you believe you shouldn’t have to pay for a shared expense, like an expensive car, it’s critical to keep your credit score in good standing. Don’t let petty arguments deter you from paying your bills, and keep all receipts as you may be eligible for reimbursement for expenses your ex was responsible for in the divorce. It will all get worked out in the wash.

It’s also essential to separate your joint bills and accounts as soon as possible to avoid financial issues if your ex stops paying their share. Your credit score rating will be impacted if your name is on the bill or account and they stop paying their share. Having your own accounts will demonstrate to lenders that you’re capable of paying off your debt independently, increasing your chances of being approved for a mortgage on your own.

Tips to help you increase your chances of getting approved for a mortgage

Improve Your Credit Score: Your credit score is one of the most crucial factors that lenders consider when determining your eligibility for a mortgage. Make sure you pay your bills on time, keep your credit card balances low, and avoid opening too many new credit accounts.

Save For a Down Payment: Saving for a down payment can be difficult, but having a larger down payment can improve your chances of getting approved for a mortgage. Aim to save at least 20% of the home’s purchase price.

Reduce Your Debt: Lowering your debt-to-income ratio can increase your chances of getting approved for a mortgage. Lenders typically prefer borrowers with a lower debt-to-income ratio as it indicates that you have sufficient income to make your mortgage payments.

Have a Steady Income: Having a stable source of income is essential for getting approved for a mortgage. Make sure you have a steady job or a reliable source of income, and avoid changing jobs or quitting your job during the mortgage application process.

Get Pre-Approved: Getting pre-approved for a mortgage can help you understand how much you can afford and improve your chances of getting approved for a mortgage. Pre-approval can also make the home buying process faster and more efficient.

Most importantly, work with a trusted mortgage broker when applying for a mortgage as a single person to ensure the best mortgage options and rate.

A trusted mortgage broker, like myself, can help you get all your documents in check, help you set your budget, and I can show you your options as to how you CAN afford your mortgage payments without becoming mortgage broke. With my added experience as a financial adviser, I can help ensure that you are making the smart, realistic financial decisions while getting you approved for the mortgage you need. Contact me, Darren Robinson, today at 705-315-0516 to set up a meeting to evaluate your options, and together we will make a plan for your fresh start, in your own home.

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