Going solo: 5 things to know about buying a house on your own

Buying a house single? You're not alone. Today, more people are getting into the property ownership game whether or not they're coupled up. While this prospect is exciting, buying a house on your own can also feel a little scary. But, if you’ve been thinking of taking the plunge, we've got your back.

Below is some of our best advice for tackling this journey so you're able to jump in to the real estate market with plenty of confidence:

1. Don’t stretch your budget too far

Proper budgeting is key, especially when you’re the only one paying the bills. You need to feel completely confident in your ability to do so each month.

While conventional wisdom holds that buyers can feel comfortable spending up to 30% of their income on homeownership costs, consider lowering that number to somewhere around 25%. That extra 5% will give you a little extra cushion to handle any non-mortgage-related expenses that may come up.

Many buyers, especially first-timers, forget that in addition to their monthly mortgage bill and utilities, homeowners also have to account for property taxes, insurance, and regular upkeep costs. You’ll want to leave room for these in your budget.

2. Solidify your financial history

Every buyer applying for a mortgage is going to undergo a certain amount of financial scrutiny. However, it’s even tougher for solo buyers, who are considered a bigger risk since their ability to pay back the loan relies on a single income. Therefore, it’s even more crucial for you to have a firm handle on your finances.

The magic ingredients for being approved are:

  • Two years of consistent W-2’s (or high-net tax returns, if you’re self-employed)
  • Debt that takes up less than 36% of your total income
  • A credit score of 540 or higher
  • Available assets like a savings account

It’s best to have all these pieces in place before you start applying. If you’re not there yet, start taking small steps like paying down debt now, so that when you do go to get approved, it’s a no-brainer.

3. House hunt with a friend

Even though you’re buying solo, bring someone you trust along for home tours. It doesn’t hurt to have a second set of eyes to help you weigh the pros and cons of each property that you visit.

When you look at multiple listings in a short period of time, it can be tricky to keep all of them straight in your head.

A trusted friend or family member can help you can help you sort out all those details, as well as act as a sounding board to help you make sense of your decision.

That said, you have the final say. You’re the one who’s going to be living in the home, so at the end of the day, you need to be happy. While your loved one is free to bring up any concerns they may have about about a particular property, they ultimately need to respect your decision. Make sure you bring someone who can fulfill that role.

4. Shop around for financing

Even though interest rates are on the rise, it’s still possible to get a good deal in today’s real estate market.

When you’re buying on own, shopping around for financing that suits your needs can make all the difference in helping you feel ready to take on a home loan.

In particular, solo buyers should explore the possibility of getting an FHA loan. This program from the Federal Housing Administration is meant for first-time buyers, but also includes anyone who has not purchased a home in the last five years. Participating requires a little more paperwork than a conventional loan, but it also offers competitive interest rates and allows for down payments as low as 3.5%.

In addition to the loan that you choose, be sure to ask your lender if they’re participating in any homebuyer assistance programs. The exact offerings open to you will vary, depending on where you live, but these programs can help offset some of your closing costs or help gather the funds needed for your down payment, so they’re worth looking into.

5. Prepare for the unexpected

We always recommend that prospective homebuyers have a sizable rainy day fund in place before they seriously start looking at buying, and it's super important for those relying on just one income.

Hopefully, you’ll never have to use it, but it’s best to have something to fall back on in case a big, unexpected expense - like a leaking roof or burst pipes - should come up.

Additionally, if you haven’t already, you may want to look into taking out a disability insurance policy. While no one likes to think of anything unfortunate happening to them, it’s a good idea to have a safety net in place in case something unexpected happens that threatens your financial stability. In the event of something like a job loss or car accident, a disability policy will help you stay on top of your bills while you get back on your feet.

Ready to start your house hunt? Use Open Listings to find houses, book tours, create offers, and save $9,604 on average when you buy with us.