Buying a Home When You're Single Montana

You don’t need a partner to buy a home. According to the National Association of REALTORS®, single buyers make up 32 percent of home buyers. But if you are going solo, there are a few things to consider before initiating the buying process.

Before you search, know what you want

When deciding what kind of home to buy, determine your needs and wants. Consider how long you intend to stay in the home and how your needs might change. Where do other singles live? You may prefer an urban area to a suburban neighborhood with child-friendly parks. You may also be looking for a smaller space (fewer bedrooms or a one-car garage). And even though you may not have kids, they should play a role in your decision. A home in a good school district may increase resale potential.

Offers from single first-time buyers will likely be competing with those made by couples. A double income does not necessarily translate into twice the money -- a couple may also have twice the debt and expenses. To help, get pre-approved for a mortgage before you start looking. This will help you know exactly how much house you can afford and will make your offer more appealing, because sellers will know your financing is secure.

Don’t let the down payment scare you off

If you are single and shopping, a 15 to 20 percent down payment may seem like an insurmountable hurdle. According to a U.S. Census Bureau Housing Affordability study, 3.2 million households cited an inability to gather a down payment as the primary reason for not being able to afford a house. However, some lenders will finance you with only five percent down and, with careful budgeting, it should be possible to pull together a modest down payment.

Low down payment options

Explore financing options with groups such as Fannie Mae and Freddie Mac, as well as government organizations such as the Federal Housing Administration, to learn about programs that can help you secure a mortgage with a down payment of less than five percent. But it’s important to understand that the lower the down payment, the more risk you present to a lender, and thus the higher the interest rate may be.

Consider condos or town homes

As a single buyer, don’t need to limit yourself to single-family homes. Consider a town house or condominium, where structural repairs and other maintenance tasks are handled by the condominium association.

Making your mortgage payment

There are ways to ease the burden of making a full monthly mortgage payment in the first few years of homeownership. Consider these options:

• Purchase with a family member. If you buy a house with your sister or uncle, you may be able to get a larger home. Work out details with your relative before purchasing – Are you both looking for the same kind of home? Will you both live there? What are the arrangements if one person wants to move out and sell their half?
• Get a roommate. Instead of buying a studio condominium, buy a two-bedroom condo. You can charge the roommate a reasonable rent to help subsidize the mortgage. If you buy a single-family home, you can rent out a room or a basement apartment. In these situations, you will have the added responsibilities of being a landlord.
• Buy a "handyman’s special." Pay less for a home that needs some repairs and fix it up yourself. If you don’t have much money for improvements, spread them over several years, beginning with the most essential. Make sure you know how to spot a fixer-upper -- you don’t want to wind up with a money pit.