Did you know that nearly one-third of all homes sold last year were purchased by single persons? Many single women and men are buying homes on their own. In fact, according to the National Association of Realtors® single women accounted for 21% of all home purchases last year, and single men accounted for approximately 10%.
So if you are a single man or woman about to venture into owning a home on your own, there are some things you should make sure you have buttoned up to protect yourself and your assets.
Know What You Can Comfortably Afford
You don't want to end up house rich and cash poor. That's no way to live. It is important to have money to enjoy your life, buy the things that you need, and put some money aside for saving and investing. When you get pre-qualified for a mortgage, the loan officer may approve you for more of a house payment than you want to have. If you want to be able to vacation, have fun and enjoy your non-working hours, then make sure you will have enough disposable income left after your housing expenses.
Your housing expenses include the mortgage, taxes, insurance, and maintenance. It also includes having enough money set aside for emergencies that are bound to happen now and then. If you've owned a home before, you know about those unexpected maintenance expenses. If this will be your first home, be prepared for the unexpected. The conventional wisdom is that you should have 6 months of expenses set aside as an emergency fund.
Find a Loan Program That Suits Your Unique Situation
Before you start shopping for a home you should find the loan program that best fits your current needs and your future plans. Take into consideration how long you think you will be in your new home. There are many different types of loans . . . some with as little as 3% down payments. If you're only going to be in your home for a few years you may also want to consider an adjustable rate mortgage that can save you considerable money in the first few years.
You should contact a trusted loan officer early in the process to advise you what kind of loan program best suits your cash requirements as well as your housing and lifestyle goals. After discussing all the options with your loan officer, you will know how much you need for a down payment, and approximately what your monthly mortgage payment will be at a given home price.
Protect Your Assets
When you are purchasing a property alone, all the responsibility obviously lies on you. To protect yourself and your assets, it is very important that you have adequate insurance coverage for life, disability. and healthcare.
If you haven't done so already, contact an attorney and prepare a will. You might also want to look into setting up a trust so that the proceeds from your insurance policies go to your independent beneficiary if something happens to you.
Consult Experts and Take Your Time
Working with people who can provide you with expert guidance is essential. Buying a home may be one of the biggest financial decisions you will ever make. You should thoroughly research your options and take the time to be sure of your decisions. Choose a real estate agent and lender early in the process so you have trusted advisors that you can ask questions of who can point you in the right direction every step of the way.
If you're planning to purchase a home soon, please contact us. We have a staff of over 100 real estate professionals who can answer all your questions and provide you with the guidance you need to make a savvy real estate decision.
