Being a single mother is not at all an easy job. They often find hardship & struggle around them. But that doesn't mean they cannot fulfill their dream of owning a home for their child. The most common scenario is that single mothers can't afford to purchase the house. It is because of her low monthly income, low creditworthiness & insufficient fund to pay the high closing value. So, in order to achieve their goals, single mothers have to consider some measures at their end as well as the available programs.
Make calculation before applying
Before taking the advantage of homebuyer’s programs, single mothers are required to evaluate their financial condition as they are the sole earning member of the family. They should first think about the type of house required for their family. The size of their family, distance from the school/office will be also considerable factors. Single mothers really should not approach for the property which is below or more than what they need.They will have to sum up their income , assets & other expenses to get an idea of their total savings. It’s important to decide whether they can afford a mortgage or renting. The monthly payment usually includes loan amount, property taxes, maintenance & other home oriented costs. Single mothers should ensure that their savings are proportionately balanced with these expenses.
Take steps to qualify for a loan
After calculating your own financial strength, it is important to get through the mortgage approval procedure. Just like each & every financial decision, you should first shop around for suitable lender who can meet up with your plans. If your credit score is low , take necessary steps to build it properly. Normally 1 or 2 year’s employment, clean credit score & payment history are enough to qualify. Do not pile up new debts & concentrate to pay off old ones - it will help up to maintain a fair DTI. Always make inquiry about your loan quote & other related information.
Take advantage of Federal programs
Let’s talk about the other supportive programs single moms have in their hands. If the monthly savings & funds are lower than estimated monthly payments, be wise and get the help of different government aided programs. Notably FHA & HUD mortgage programs are the best for consideration. The Federal Housing Administration (FHA) provides loan programs with easier qualification criteria & enable the lenders to provide loans with comparatively lower monthly down payments (3.5%) & low closing costs. It is proved to be much lower than the conventional loan programs. USDA Rural development loan program is another important source to get loans with zero down payments. There’s another program called Housing choice voucher program. It provides vouchers to the single mothers enlisted in the lowest income category determined by the particular state.
Look for the other options when you have poor credit
Single mothers often suffer from low credit score which is probably caused by unemployment , any debt settlement program or separation from the marriage. These people will be benefited by availing different bad credit home loan programs aided by the federal government. These loans includes FHA & USDA which allows the borrower the flexibility in credit history & income sources. Other options single mothers can opt for are seller financed loans (partially or fully financed), own-rental loans (rent divided proportionately into monthly payments & seller’s profit) & sub-prime loans (applied to the non-eligible persons).
Save money even after buying the home
After buying the home , there is an option for the single moms to save from home buyer’s tax credit. As a first-time -buyer, a single mom can avail the benefits from IRS income tax credit which is effective since 2009. Those who are eligible can save tax credit up to $8,000 P.A from the income tax deduction.
These are some available options which can make a single mother’s dream come true. Make sure you choose the right path to success on this Mother’s day & provide your children a better future ahead.