The picket fence dream probably looked something like this: Proud spouse by your side. A couple of smiling kids. Fluffy dog at your feet. Maybe even a few blooming rosebushes. But now you’re an adult—or, at least, you’ve reached the age in which you’re supposed to act like one—and here you are standing alone at the fence. You’re no sad anomaly. You’re part of a growing trend: accomplished, single individuals who are making the American dream come true on their own terms.
The National Association of Realtors says that a quarter of homebuyers today are single. That’s a lot of people taking the plunge without taking the plunge. So is buying a house as a single person out of order? Only if you think you need a ring on your finger to pay the mortgage (Hint: your ringerless fingers will look mighty fine signing on the dotted line!).
Getting a loan
Can you be turned down for a loan simply ‘cause you’re single? Nope. Will approval be as easy as it would be with a co-signor? That depends.
“Banks are not allowed to discriminate based on marital status, but tighter lending standards can potentially pose a challenge to single buyers because they only have their own income to qualify for a loan,” said MONEY Magazine.
Especially in pricey L.A., loan approval will depend on income, home price, down payment, credit score, and existing debts. That pesky loan-to-value ratio will be a factor (“Fannie Mae recommends that buyers spend no more than 28 percent of their income on housing costs, according to Bankrate).
Experts generally recommend homebuyers have a minimum of six months of expenses stashed away for emergencies. The more you can add to that, the more cushion—and peace of mind—you’ll have. After all, you won’t have someone else’s income to fall back on if you suddenly become unemployed. Nor will you have it to cover repairs that need to be made.
And they will need to be made.
They always need to be made.
Here are a few things to consider:
- “One of the most misunderstood aspects of ownership is how much money is needed to maintain the home,” said certified financial planner Jennifer Lazarus on Bankrate. “You can expect anywhere from about 1 to 3 percent of the home’s value paid out each year to cover fixes and projects.”
- If you are in a position to get a home warranty, by all means, do it! You’ll be glad to pay the nominal monthly fee when your air conditioning goes out on the first day of summer.
- When calculating your monthly payments on a new house, principal, interest, taxes, and insurance are the givens. Add in a homeowner’s association fee if you are buying in a planned community. How about landscaping fees and housecleaners? The key to creating a workable budget is considering everything.
Planning for today–and the future
“Condos and townhouses are popular for singles, who don’t need all the room of a house, and appreciate the lower mortgage and heightened security. Smaller properties may also mean less upkeep––a timesaver if otherwise it would be just you doing all the mowing, painting and other chores,” said Realtor.
But, is buying what you need today the smartest move?
“If you’re planning to stay in an area for years, would your new place have room to include additions to your life? A studio might be all you need now, but if you could afford a one-bedroom, perhaps that’s an investment in the future worth making,” they said.
All things considered, it’s well worth the risk
Historically, the idea of homeownership has been celebrated, berated, encouraged, and skewered. A new school of thought undervalues the long-term financial benefits in favor of short-term satisfaction.
“We no longer take truly long-term views for our future, and we optimize our lives for small but instant gratification instead of big wins in the future,” said Riskology. “Even though the reality is owning a home will probably save you hundreds of thousands of dollars over your entire life—one of the smartest financial moves you can make.”And one of the most satisfying.
Tripp Jones Real Estate for Santa Clarita and San Fernando Valleys, Call 661-733-4555 or 818-527-6292