For many women, homeownership ranks higher on their goals list than getting married. This is especially true for single-parents. Many moms want to have financial security and know that they have something to leave their children. Owning your home provides a level of comfort and control that renting lacks. The challenging question is determining when is the right time to buy.
Here are seven factors to reflect on before making an offer.
1. Consider the Season
Did you know that the seasons influence the housing market? Even the days of the week can affect prices. If you are looking for the best deals, wintertime offers the best value. However, if you’d like a wide range of options to choose between, the summer is the time to search.
Many families want to buy a home and get settled before the new school year begins. As a result, May, June and July are some of the busiest months in the industry. If you choose to follow this trend, you may find the competition to be fierce. With greater demand comes an increase in bidding wars. In some situations, houses may sell after being listed for only a day.
If you are looking for the best of both worlds, then making an offer in the early fall is desirable. The prices will be lower, you’ll still have a variety of options to choose between, and your children will only have missed a few weeks of school if it’s a new area.
2. Analyze Your Income
One of the most significant factors to consider is your income. Is your income steady, and do you make enough money to afford regular mortgage payments? If the answer is no, you may still have options using assistance programs. However, it’s best to be in a financial position where buying a house is feasible, and your income makes you a good loan candidate. Remember, to choose something under budget so that you have the flexibility to cover unexpected expenses.
You should also evaluate your savings. Do you have money saved for a down payment? Most traditional mortgages require a 5% down payment, but government-backed programs like FHA may require as little as 3.5% down.
3. Check Your Credit
Most first-time buyers only put down a partial deposit and require a mortgage to cover the remaining costs. Your credit score and history has a significant impact on your ability to get accepted for a loan. There are many sites, like Credit Karma, that allow you to check your credit score for free. They also offer advice on how to raise your score. The higher it is, the better your chances of getting a loan with a low-interest rate.
Examine your credit and talk with a lender. What loan offers would they offer if you applied? If the proposals aren’t to your satisfaction, spending a few months raising your score before trying to buy a house may be worthwhile.
4. Acknowledge the Pros and Cons
Take a close look at your current life. If you are renting, the pros and cons will change once you own your property. For some mothers, the advantages may outweigh the disadvantages. Still, many women may want to hold off if they rely on rental perks — like not having to cover property taxes and appliance expenses.
Purchasing a home will also impact your children’s’ lives. Having additional space may allow them to have their own bedrooms, but they also might be attending a new school district. These are all elements worth considering before making a final decision.
5. Determine the Market Flow
The economy has a massive impact on the housing market. If the market is low because of an economic downturn, it may be one of the best times to buy because of cheap housing prices. However, money is usually harder to borrow during economic lows, so this may complicate your planning.
After speaking with a lender, you’ll better understand what to expect during the current market situation.
6. Research Home Buying Assistance Programs
As a single mother, there are many home buying assistance programs you may qualify under. These also may cover things such as utilities, child care, education and mortgage payments — research before making any payments to determine your eligibility.
The U.S. Department of Housing and Urban Development (HUD) has counselors and resources available at their local offices to answer questions and help single-parents find housing options. You should schedule an appointment for personalized recommendations. Who knows, you may save yourself thousands of dollars!
7. Examine Related Expenses
Homeownership comes with a variety of expenses besides the down payment and monthly mortgage payments. For example, you’ll have monthly utility bills to cover. You’re also responsible for home maintenance costs and home insurance.
While you may have some furniture from your last residence, having an entire house to fill will likely require you to buy more products. If your residence is part of a housing association, then you may also have HOA fees.
Be Honest With Yourself
Now that you’ve examined these seven crucial factors, be honest with yourself — do you feel ready to buy? Being strategic will help you in the long run. If you’re short on budget or it’s an expensive time of year, it may be worthwhile to wait a while longer. Otherwise, if you considered each component and had positive findings, then maybe now’s the time to make the leap.