Article Courtesy of Brittany Fisher:
A recent study based on gender-based income and home ownership figures revealed that there’s not only still a substantial wage gap between men and women, but that men can afford a substantially higher percentage of homes than women in cities throughout the United States from Seattle to Miami.
The situation can seem daunting to single women who want to enter the real estate market for many reasons, including saving for a down payment and the generally intrusive nature of the mortgage process, which can be frightening (or depressing) for anyone, regardless of gender. The good news is that the process is the same for women as it is for men. And there’s plenty you can do to put yourself in a better position to buy.
Review your credit report
Your credit report provides detailed information about all your accounts and how timely you’ve been in paying them over the past several years. It’s a blueprint of credit worthiness lenders use to get an idea of your ability to repay loans on a timely basis. Pay close attention to what’s on your report: there could be incorrect or outdated information that needs correcting. And it’ll show where you were late, giving you the opportunity to explain to a lender why you got behind. This process often intimidates people who have had difficulty in the past, but try to see it as a valuable tool for improving your report by showing exactly where you need to do some work.
Finding and fixing problems
Negative credit information will appear on your report as “adverse,” and indicates to a mortgage lender that you’re unlikely to abide by the conditions of a mortgage. Obviously, these are a problem for you as a potential homebuyer. If you have adverse accounts, don’t despair. Go through each one, make sure it’s legitimate and contact each creditor or credit agency to see about having them taken off your report or make arrangements to resolve them in some manner.
Begin saving for your down payment
One rule of thumb is to save approximately 20 percent of the total cost of the amount of the mortgage you’re seeking. When you consider purchasing a $200,000 home, for example, a healthy down payment would run you $40,000. That’s a hefty chunk of money, particularly when yours is the only income with which to work. The sooner you can begin saving toward it, the sooner you can expect to become a homeowner. Fortunately, there are loan programs that can make this part of the homebuying process considerably less painful. A Federal Housing Administration loan is ideal for a single-income homebuyer because it requires just a 3.5 percent down payment. Other government agencies, such as the USDA and Veterans Administration, offer loans that allow you to avoid making a down payment.
When you’re pre-approved for a loan, you may be given a figure that sounds great but is actually considerably higher than you can realistically afford. It’s in your best interest to look for a house that’s below your pre-approved amount because you’ll be in a better position to pay down the principal and make real headway against your loan. A manageable mortgage payment means you’ll be better equipped to deal with problems that always seem to arise, such as a broken-down dishwasher, roof repairs or a flooded basement. Research the prices of homes in your area. For example, homes in New York City, have an average listing price of $560,000.
Moving may seem like a snap once you’ve made it through the homebuying process. Nevertheless, take it just as seriously. Start packing a couple months ahead of time and declutter as you go. Carefully price moving companies. Make sure they are insured and have a good BBB report and good word of mouth from past customers.
Going it alone as a homebuyer can be a scary prospect. Bear in mind that mortgage companies are in business to make loans. Don’t allow yourself to feel unworthy or that the whole thing’s beyond your grasp. There are many programs today aimed at helping single-income buyers realize their dreams.
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