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Tips On Buying A House By Yourself

Molly Grace8-Minute Read
May 03, 2021

Despite what some of our most dominant cultural narratives might have you believe, homeownership isn’t just for suburban married couples who are starting out on life’s journey together. Everybody needs a place to live, and while renting has become increasingly common through the years, owning a home is still a priority for many Americans.

However, there’s no denying that having another person on your mortgage application can make the approval process easier for many households, especially when it comes to the amount of money a lender is willing to give you for your purchase. Plus, saving for a down payment can take more time when you’re doing it on your own.

So, does that mean it’s impossible to buy a home on a single income? Absolutely not! In fact, the second largest group of home buyers in the U.S. is single women, who make up 17% of all home buyers, according to the National Association of REALTORS® (single men are tied with unmarried couples for third place, each with a 9% share).

Let’s take a look at what it looks like to buy a home by yourself, including some of the challenges you may face and how you can prepare for the process.

The Hurdles To Buying On Your Own

The two main challenges of buying a house on a single income have to do with qualifying for a sufficient loan amount and saving for a down payment.

Mortgage Qualification

Mortgage lenders will look at how much money you make each year to determine how much you can afford to borrow. The larger your income, the more house you can afford. When it’s just you on the mortgage application, you don’t have the benefit of combining your income with a spouse’s or partner’s to receive a larger mortgage.

If you’re a high earner, this might not be a big deal. But those with lower or even average incomes may have trouble finding a house they like that’s within their price range. That doesn’t necessarily mean you won’t be able to find a house you can afford, period, but you may have to be willing to compromise on certain things, such as size or location.

To see how this works in practice, let’s plug some numbers into our handy home affordability calculator.

Full-time workers in the U.S. earn around $957 each week, according to BLS.gov. That means they’re typically earning around $49,764 each year before taxes.

For the purposes of this example, say you’re a typical worker with a salary of $49,764. Each month, you pay about $300 toward debts you owe (student loans, car payments, etc.). You have about $15,000 saved up for a down payment and closing costs, and you plan on buying a home somewhere fairly average in terms of home prices – perhaps an affordable Midwestern suburb.

According to our calculator, you’d be able to afford a home that’s around $167,000. Homes around this price tend to be smaller starter homes, with less square footage than average.

Now, say you’re buying with a partner who also makes a median income. If you were to apply for a mortgage together, you could potentially afford a home worth twice that much. Buying with two incomes can expand your pool of potential homes, giving you more to choose from.

Down Payment

Additionally, when you share the goal of buying a home with another person, you can both work to save towards that goal, which means that saving for a down payment might not take as long as it would for a single saver.

However, these aren’t necessarily reasons why a single person shouldn’t buy a house on their own. Instead of thinking whether it makes sense to buy as a single person rather versus buying with a partner, you should compare buying a home by yourself to whatever your current situation looks like. If you’re already living in a small apartment and would prefer to own rather than rent, a small starter home might be the perfect setup for you. It’s all about what works for you and your finances.

The Benefits Of Buying Solo

If you’ve ever watched any of those home buying shows where couples struggle to agree on their must-haves, you know that buying a home with someone else can come with a lot of compromise.

When you’re the only one calling the shots, you can get exactly the home you want (as long as it’s within your price range).

Not only that, but owning your own home, rather than renting, can be a financially savvy move for any household. If you’ve been putting off homeownership simply because you think it’s not really necessary for a single person to own their own home, you could be missing out on the opportunity to add an important asset to your financial profile. Just because it’s just you in your household doesn’t mean you can’t take steps to build a secure financial future for yourself.

How does homeownership play a part in that? Owning a home gives you the ability to build wealth just by making your monthly housing payments.

When you pay rent, you don’t get that money back. As you make mortgage payments, you get that money back in the form of equity in your home. Equity is a kind of confusing-sounding word that just means the difference between what your home is worth and what you owe on your mortgage.

Keep in mind that your home can grow in value over the years that you own it. Be careful, though: it isn’t guaranteed that your home’s value will increase. If something happens to your home or the area you live in that causes its value to drop, you’re still on the hook financially in a way renters aren’t.

Tips For Preparing To Buy A Home On A Single Income

Homeownership isn’t usually something you can just jump right into. Once you’ve decided that buying a home is right for you, you’ll need to do some preparation and planning before you can achieve this goal.

Get Creditworthy

Unless you have a lot of money saved up, you’ll probably need to get a mortgage loan to purchase a home. When applying for a mortgage, you don’t just want to get approved – you also want to be granted the most favorable terms. To secure an attractive interest rate, you’ll want to have a strong credit history and a high credit score.

Start by requesting a copy of your credit report from each of the three major credit bureaus – Equifax®, Experian™ and TransUnion®. You can do this through the official website, annualcreditreport.com. You’re entitled to one free report each year (however, through April 2021, the bureaus are offering free weekly reports due to the COVID-19 situation).

Check each report for inaccurate information and get an idea of where you stand credit-wise. If you have a recent late payment or any other derogatory marks on your report, you may have to wait a while and work on building your credit back up before you’ll be able to be approved for a mortgage.

You’ll also want to know what your credit score is. This number won’t be on your credit report. To see your score for free, you can create an account with Rocket Homes℠ or simply sign in using your current Rocket Account.

Typically, a credit score of 620 is the starting point of eligibility for most mortgages, though some programs, such as FHA loans, may allow you to go lower. Those who want access to the best rates should shoot to get their scores in the 700+ range.

How can you increase your score? The best way is to make debt payments on time, every time. It’s also good to keep the amount of available credit you use to a minimum. For example, if you have a credit card with a $10,000 limit, you should try to keep your balance below $3,000.

Consider Your Debt

Another credit-related factor that’s used in qualifying you for a mortgage is your debt-to-income ratio (DTI). Your DTI is the percentage of your monthly income that goes towards debt payments. Lenders often require applicants to have a DTI of 50% or less, but different lenders or loan programs may require lower ratios.

If you want to buy a house but already have a lot of debt, you may want to focus on paying down some of your debt first.

Save, Save, Save

In most cases, you’ll have to bring a down payment to the table in order to purchase a home.

Putting down 20% of the purchase allows you to avoid paying for mortgage insurance. If that’s way out of your price range, fear not; it’s possible to get into a home with a down payment as low as 3%.

If you’re buying a $200,000 home with a 3% down payment, that’s $6,000 down. That’s still quite a bit of money, but likely more realistic than a 20% down payment of $40,000.

This is often the biggest hurdle for first-time home buyers, and for those who are doing it alone, it can be all the more challenging.

If you’re having trouble saving up for your down payment and closing costs, take an honest look at your current budget and try to find some areas you could cut back on while you work on your savings goals.

See if you can commit to putting aside a certain portion of each paycheck into your savings. Or, consider taking on a side hustle to bring in a little extra income.

Figure Out Your Budget

Once you’re ready to start house hunting, you’ll want to know how much house you can afford.

A home affordability calculator can estimate what price range fits your budget based on the factors you input. It isn’t perfect, but it can give you an idea of the types of homes you’ll be looking at when you start house hunting.

Remember, too, that homeownership typically comes with more costs than renting. When something in your home breaks, there’s no landlord to pay to fix it. Be sure to factor unexpected repairs and regular maintenance into your budget.

Determine What You Want

Now comes the fun part: deciding what features you can and can’t live without. Do you prefer a condo or a single family home? Do you want a big backyard? A sizeable kitchen?

Before you begin house hunting, it can be helpful to jot down some must-haves to share with your real estate agent as you begin the home buying process.

Shop Around For Your Mortgage

One of the first big steps you’ll take in the home buying process is getting preapproved for a mortgage. However, you shouldn’t simply go with the first lender to offer you a loan without considering whether they’ll be able to meet your needs.

Talk to several lenders to get their pricing and compare. Shopping around for the best rate could potentially save you thousands of dollars over the life of the loan.

Find A Real Estate Agent You Can Trust

Whether this is your first time buying a home or your 50th, having an experienced, trustworthy real estate agent by your side is vital. They’ll help you navigate the ins and outs of the home buying process and be your advocate through negotiations and contracts.

When you’re buying alone, having a real estate agent you trust is all the more valuable, as they can be on the lookout for things you might not notice or consider.

When choosing a real estate agent, do your research and read their reviews. Sit down with the ones you’re considering to get a feel for how they operate. You want to find someone who you work well with and whose opinion you trust.

Should You Buy A Home By Yourself?

Whether homeownership is right for you shouldn’t be determined by your marital status; it’s about whether is makes sense for you financially. Ultimately, the answer to that question is going to be different for everybody.

If the time is right for you to begin your homeownership journey, you can get started online with Rocket Mortgage® by Quicken Loans®.


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Molly Grace

Molly Grace is a staff writer focusing on mortgages, personal finance and homeownership. She has a B.A. in journalism from Indiana University. You can follow her on Twitter @themollygrace.