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Single women are the second largest group of homebuyers, making up 19% of all buyers in 2021, according to the National Association of Realtors (NAR). Married couples make up 60% of all buyers, while single men and unmarried couples each make up just 9% of homebuyers.
Though single women make up such a large portion of the market, they face some unique hurdles to homeownership. Women still earn around $10,000 less than men, according to the US Census Bureau. This wage gap can make it harder to save for a down payment or afford a mortgage payment on a single income.
But there are things single female home shoppers can do to increase the likelihood they have a successful homebuying experience.
Getting approved for a mortgage comes down to three essential things: your credit score, down payment, and debt-to-income ratio (DTI).
When a married or cohabiting couple purchases a home together, they typically apply together, meaning both of their incomes are used to determine how much house they can afford. A higher combined income generally means you’ll be approved for a larger mortgage than you would if you applied on your own, because you’ll have a lower DTI.
Plus, two people saving together for a down payment will likely reach their goal faster than someone saving on their own.
Because home values have grown so rapidly in the past couple of years, buying a home on a single income has become increasingly difficult, particularly for low- or middle-income borrowers.
There are a lot of benefits to homeownership, including wealth-building and the stability of a monthly housing payment that stays the same for as long as you’re in the home.
“Buying a house offers economic freedom for single women contemplating retirement,” says Elena Jones, CFP and co-founder of FinanceJar. “Furthermore, numerous single people are starting to realize that they do not require a long-term partner to own a residence, and that housing affordability provides monetary sustainability that is difficult to obtain elsewhere.”
Here are some tips and strategies single women can use as they prepare to begin their journey to homeownership.
Like the idea that single women can’t be homeowners, the 20% down payment is a thing of the past. The typical first-time homebuyer puts down 7%, according to NAR. But you don’t even need that much to purchase a home.
With a conventional mortgage, you may be able to put down just 3%. On a $250,000 home, this is equal to $7,500. FHA mortgages allow down payments as low as 3.5%, while VA and USDA mortgages require no down payment at all.
But don’t forget to factor in closing costs, which can equal between 3% and 6% of the loan amount.
Depending on the type of loan you get, you may be able to qualify for a mortgage with a score of 580 or lower. But the higher your score, the better your rate.
A lower mortgage rate can potentially save you hundreds of dollars each month, and thousands of dollars over the life of the loan.
One of the quickest ways to improve your credit is to lower your utilization on any revolving credit accounts you have. If you have a high balance on any credit cards or other lines of credit, consider paying it down to lower your utilization, or ask if you’re eligible for a higher limit.
You can also build a strong credit history in the long term by ensuring that you’re making on-time payments and having a good mix of different types of credit accounts.
Part of the joy of homeownership, especially as a single woman, is the feeling of freedom that comes with it. But if you take out a mortgage that stretches your budget too far, owning a home can quickly start to feel like a huge burden.
Many experts suggest following the 28% rule to determine how much house you can afford. This rule of thumb states that you should spend no more than 28% of your gross monthly income on housing expenses.
You can find this number by multiplying your gross monthly income (the amount you make before taxes) by 0.28. So if your monthly income is $5,000, your mortgage and other housing costs shouldn’t exceed $1,400.
Important: Just because a lender approves you for a certain amount doesn’t mean you should borrow that much. Consider what you can comfortably afford to pay each month — you shouldn’t have to cut a bunch of things out of your budget just to make owning a home work for you.
New homeowners are often surprised by just how much money they end up needing to put into their house each year in the form of regular maintenance or repairs.
Before you make the leap into homeownership, make sure you can afford all of the responsibilities that come with it, not just the monthly payment. One rule of thumb says to set aside between 1% and 4% of your home’s value each year to cover home upkeep.
When you’re the only one paying the mortgage, there’s less wiggle room for budget setbacks, such as if you were to unexpectedly be laid off.
“Buying a property is not without consequences, particularly for a single individual coming onto the market,” Jones says. “The person relies on a single paycheck to cover loan repayments and has no fallback revenue from a companion.”
Every homeowner should have an emergency fund that has enough savings to cover three to six months of living expenses. But for single homeowners, its especially important, since you won’t have any additional income to rely on if things go south.
A good real estate agent is vital for any first-time homebuyer, but especially so for a single person buying on their own.
While one of the benefits of buying a home by yourself is that you don’t have to worry about making compromises on the features you want in a house, it also means you don’t have another voice or set of eyes pointing out things that could be inconvenient or troublesome down the road. A good real estate agent will fill that role for you.
For example, you might like that a house has a lot of trees in the backyard, but someone else might see those trees and wonder who is responsible for trimming the branches that are hovering over the power lines, or if the roots are too close to the foundation.
Do your research on agents in your area and read online reviews to get an idea of who goes above and beyond to make sure their clients find the home that’s right for them. You may also want to meet with a few agents first to get a sense of how well you’ll work together before committing to one.
Get preapproved with multiple lenders to see the types of mortgages and rates that are available to you. A good lender will be able to explain all of your loan options and help you understand which ones best suit your needs.
If you have a lower income or a rocky credit history, an FHA mortgage might be a good choice. If you have a great credit score and want to make a low down payment, you might find that a conventional mortgage is right for you.
If you’re a veteran who meets minimum service requirements, a VA mortgage is an extremely affordable option, allowing 0% down with no monthly mortgage insurance payment. If you live in a rural or suburban area, you may be eligible for a USDA mortgage, which also allows 0% down.
If you think you won’t be able to afford to buy a home on your own, you may qualify for some form of assistance. Some local or state housing agencies offer mortgages to low-income individuals that offer down payment assistance and low rates. These agencies may also offer other forms of down payment assistance for first-time buyers.
Many lenders also offer mortgages specifically geared toward first-time homebuyers that have features like low down payments, closing cost assistance, or flexible credit guidelines.
Requirements for homebuying assistance or special mortgage programs can vary, but you may need to meet income limits, and you’ll likely have to take a homebuying course.
“Awards, down payment guidance, and other tailored assets are frequently available to first-time home buyers who finish training and programs,” Jones says.
If you’ve always rented, buying a home for the first time can be empowering. But it’s also a huge commitment. Though moving is rarely fun or easy for anyone, it’s generally easier for a renter to find a new place if their current home doesn’t suit their needs.
If you purchase a home and decide it’s not right for you, you could lose a lot of money by selling too soon after moving in. You should typically only purchase a home if you plan to stay there for at least five years. That gives you time to recoup all the closing costs you paid when you purchased the home.
To avoid buyer’s remorse, take some time to think about what your ideal home looks like. Does it have a big backyard? Is it close to work? What are some things you like about your current home that you aren’t willing to give up?
Because you’ll probably want to stay in the home for at least the next five years, it’s important to not only think about your needs right now, but also what they’ll look like down the road.
Do you need multiple bedrooms in case you decide to bring in a roommate at some point? Do you have enough space for your kids as they grow? How easily can you make upgrades that allow you to age in place?
When you make an offer on a home, you’ll typically have the opportunity to have the property looked at by a professional home inspector before you fully commit. Some buyers waive this contingency to make their offer more attractive, but it’s generally not a good idea to do so — at the very least, a pre-offer inspection can help ensure you aren’t signing on to purchase a home that’s going to cost you tens of thousands of dollars in repairs.
An inspector will go through every room and inspect each component of the house, inside and out. If the inspector finds major problems you didn’t notice during your initial viewing of the home — foundation issues, for example — you can back out of the purchase.
Inspections are also incredibly valuable because they’re a great way to get to know the home you’re buying and get an idea of all the more minor repairs and maintenance that needs to be done. As a single homeowner, you’ll be solely responsible for all of this upkeep.
Take advantage of your home inspection by asking lots of questions. Find out where the main water shut-off valve is located, how to change the filters in the furnace, or when the roof will likely need to be replaced.
If you think you might get married one day, it’s worth thinking about how you want to handle ownership of your home in your marriage.
While property that is acquired prior to marriage is typically considered separate property, not marital property, there are situations where a spouse could be awarded a certain portion of the home’s value. This could happen if, for example, your spouse contributes to upgrades that increase the value of the home.
If you’re getting married and want to be sure that you keep full ownership of your home in the event of a divorce, it’s a good idea to talk with a lawyer and get a prenup.
House hunting can be a lengthy process, especially if there aren’t many homes in your price range where you live.
Some buyers get lucky and only need to make one or two offers before they find a seller willing to accept their bid. Others have to make 10 or more offers before they get one accepted.
If you’re struggling, work with your real estate agent to make sure you’re making competitive offers, and that you’re being realistic about the types of homes you’re looking at. If you’re in a market where bidding wars often drive up the price of homes, you may need to look at homes a little below your price range, so you have room to make an attractive bid.
Homeownership isn’t always the right choice for everyone. Renting comes with less responsibility and more flexibility if you move around or travel a lot. It can also be cheaper.
But there are a lot of benefits to homeownership. With each monthly housing payment, you’ll be building equity in your home. If you have a fixed-rate mortgage, you won’t have to worry about your monthly payment changing dramatically (though your insurance or taxes may increase a little bit each year).
Owning a home can be a vital part of a single woman’s long-term financial security. But it’s important to be sure that it makes sense for your finances and your lifestyle.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.
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