MORTGAGE MATTERS

3 min read

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Jan 2022

Can I Buy a House by Myself?

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WHAT YOU'LL LEARN

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The obstacles of buying as an individual

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Ways to overcome obstacles

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How you can get started buying alone

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WHAT YOU'LL LEARN

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The obstacles of buying as an individual

check icon

Ways to overcome obstacles

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How you can get started buying alone

Picture your perfect home. It might be somewhere with glittering green lawns and picket fences lining the entire street. Or maybe it’s something more unique and modern without a neighbor for miles. Whatever your perfect home is, know that buying it by yourself is completely in the realm of possibility.

If you’re in the camp of thinking the perfect home is out of reach if you want to buy alone, we’re here to tell you it doesn’t have to be! Funding your homeownership dreams is still a possibility for you, but there are some obstacles you’ll need to overcome first.

The Challenges of Buying Alone

If you plan on buying alone, you’ll be funding the purchase with one singular income. Plus, your loan amount may be smaller than a similar loan with two people making financial contributions. Depending on your loan program, you must manage the upfront costs, like the down payment, closing costs, and any inspections, all by yourself. Research your state’s Down Payment AssistanceA special financing program that helps make homeownership a reality for homebuyers who otherwise may not have the funds for a down payment.Down Payment AssistanceA special financing program that helps make homeownership a reality for homebuyers who otherwise may not have the funds for a down payment. programs for information on grants and secondary financing options.

Another obstacle will be your pre-approvalA validation of exactly how much of a loan for which you are approved.pre-approvalA validation of exactly how much of a loan for which you are approved. amount. When you apply for a loan, your lender will look at your credit, income, and assets to decide if you’re a good candidate for lending. Lenders want someone who’ll make all of their payments on time for the entirety of their loan’s term, and because you’re buying alone, you might be seen as more of a risk than a couple with two incomes.

Additionally, the lender will calculate what’s known as yourdebt-to-income (DTI) ratioThe percentage of your gross monthly income that is used to pay your monthly debt and determines your borrowing risk.debt-to-income (DTI) ratioThe percentage of your gross monthly income that is used to pay your monthly debt and determines your borrowing risk.. Every dollar is important when it comes to homebuying with one income. Any amount of debt can hurt your borrowing chances. More information on your DTI can be found in the Knowledge Center, but simply put, a greater DTI might make you more of a risk in the lender’s eyes. It might be in your best interest to pay off a significant portion of your debt before applying.

If you meet the loan’s qualifications, the lender will send a pre-approval letter stating how much of a loan you can afford. Now with some of the biggest obstacles addressed, let's talk about the benefits of buying as an individual.

The Benefits

There are some exclusive advantages to buying alone as opposed to buying with a partner. First and foremost, you won’t need to compromise on any aspect of your new home. You get the final say on everything. Granted, you’ll likely be looking for homes in a different price range, but you’ll get to pick the one that caters to all or most of your individual needs.

Secondly, all the equity you build from paying off your mortgage’s balance and making structural improvements to your home goes directly to you. You’ll set yourself up for success when it comes time to sell with all the equity you build. Check out our other articles to learn more about the ways to build and maintain equity.

Getting Started

We hope this article eliminates any fears you might have about entering the home market as an individual buyer. Just remember, you’re not alone! Your lender will be next to you, ready to answer or talk through any of your questions and concerns.

Before agreeing to your mortgage, you might want to reduce your DTI, improve your credit, and explore all the loan options available to you. Applying is not a commitment, so send in applications to several lenders to see how much you’ll be pre-approved for prior to making a final decision. And when you’re ready, make those homeowning dreams a reality!