Mortgage Tips for Single Parents
If you’re a single parent looking for a home loan, it can seem challenging to find one that suits your needs. Although mortgage lenders generally don’t look at marital status when reviewing home loan applications, they do look at the following:
- Debt and payment obligations
- Total household income
- Net income after taxes, credit scores, and more
If you’re interested in a home loan, it helps to speak with a lender first, and to consider the following strategies:
- Explore Less Conventional Loans – There are many different loans available beyond conventional loans. There are USDA loans. There are VA loans. Many states have their own loan programs to help people – including single parents – qualify for a low or no down payment loan with rate assistance. It’s worth exploring these loans to see what you may qualify for.
- Pay Down Highest Monthly Payments First – Your income is important, but it is not as important as reducing your monthly required payment obligations. If you have any high monthly payments (such as a car payment) see if you can find a way to pay that down first, so that your mortgage will represent a smaller portion of your income.
- Find a Cosigner – It’s tough to ask someone to be a cosigner, but the benefits can be fairly substantial. Cosigners can increase the amount you qualify for and lower the interest rates (if they have a good debt to income ratio and good credit). However, note that if someone cosigns your loan, their credit score will react as though they themselves bought a new home. That may hurt their credit score, which in turn may hurt your relationship.
There are many programs available for both single moms and single dads. For more information about any of these plans, and to find out what mortgages you may qualify for, contact Open Mortgage today.