Suddenly Single? Don’t Let Your Relationship Status Keep You From Buying a Home

By taking certain steps, homeownership will be within reach.

It’s no secret that becoming a homeowner can be a difficult process. According to a report by Statista, homeownership in the U.S. has been on the decline since 2004, with the rate of homeownership at 64.8 percent in 2018. But, the process is complicated even further when you’re single and lack the support of a second income.

Whether your partner passed away or you’ve simply separated, your dream of homeownership might now seem out of reach. However, you shouldn’t let your new relationship status keep you from achieving your financial goals. With careful and strategic planning, owning a home can be a reality. You just have to understand how to improve your odds.

See: How to Buy a House: 10 Essential Steps

Start Budgeting

Buying a home is a costly business, especially when you are doing it by yourself. The best way to save for a house comes down to creating a budget. You’ll need to start saving for a house now if you want to overcome the first and, arguably, the biggest money hurdle: a down payment.

Most mortgage lenders require 5 to 20 percent for a down payment on a house, according to the Mortgage Reports. However, the percentage of a down payment on a home can vary by city and state. For example, homebuyers in San Francisco are likely to pay 22 percent for a down payment on a home, according to a 2018 study by Realtor.com. But homebuyers in San Antonio, Texas, are likely to pay 8.3 percent. 

Learn: How Much Is a Down Payment on a House?

Homebuyer Chelsea Hoffer started saving 20 percent of her income to make her goal of owning a home a reality. “Every pay period, I put aside part of my paycheck and I lived on the rest,” Hoffer wrote in a piece for banking and budgeting app Simple. “To accomplish this, I largely kept the lifestyle of the penniless student I had been a few years earlier with a little extra wiggle room so I could enjoy my life. I was happy to forgo a larger apartment or a new car because I had a ton of bigger plans.”

Improve Your Credit Score

Loans are a lot easier to qualify for when you’re married. As a single person, making sure your credit score is in good standing will improve your chances of getting approved for a home mortgage at the best interest rate. According to Consumer Finance, “most mortgage lenders look at scores from all three major credit reporting agencies — Equifax, Experian and TransUnion — and use the middle score to decide what rate to offer you.” 

One way to increase your credit score is to prioritize paying down your debt. Mortgage lenders look at your debt-to-income ratio in order to gauge your ability to make monthly payments and repay any money you borrowed. 

Discover: How to Raise Your Credit Score by 100 Points (Almost) Overnight

Check Out Different Lenders

Not all mortgage lenders are the same. Real estate company Zillow recommends researching different lenders that can offer a loan unique to your financial situation. For example, if you’re a first-time homebuyer with a low credit score, look for a lender that can provide an FHA loan. With an FHA loan, you only need to make a down payment of 3.5 percent and have a credit score of 580. 

Research Different Areas You Want to Live

The retail price for a home in New York is not going to be the same as the retail price for a home in Kansas. Many factors, such as the cost of living, play a role in how expensive homeownership is. So, researching the area of your potential new home could help you manage expectations, find out what’s best for your wallet and get a clearer picture of any financial strain you’re in for.

You can start by looking at the cost of living in different states. Southern states like Mississippi and Georgia have some of the lowest costs of living in the country. In fact, Mississippi is the cheapest state in the U.S. to live in, with the cost of living around 15 percent lower than the national average, according to a GOBankingRates study

Read More: From Alabama to Wyoming: The Cost of Living Across America

Get a Side Hustle

If you don’t want to sacrifice your lifestyle in order to buy a house, then consider adding another stream of revenue. A blog post on DaveRamsey.com points out the potential savings you can score for your down payment by getting a side hustle. 

“If you’re looking for another way to turbocharge your income, there’s nothing like picking up a side gig or a second job!” he wrote. “Say you work 16 hours per week making $10 per hour. That’s an extra $120 per week after taxes. Keep that up and you’ll have more than $12,400 to add to your down payment savings in 24 months.”

Click through to read about 101 side hustle ideas and how to start them without quitting your job.