Buying a home when you're single

Who said you can't do it alone? These days, more and more single people are diving into the homeowner's market. In fact, according to the National Association of REALTORS<sup>?/sup>, single buyers make up 32 percent of home buyers. But if you are going solo, there are a few extra things to consider during the buying process.

Putting the "single" in single family homes
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. Your needs may differ from the traditional needs of a couple. For example, you may prefer an urban area with other singles to a suburban neighborhood with child-friendly parks. You may also be looking for a smaller space with fewer bedrooms or a one-car garage. While you may not have children of your own, you should consider looking for a home in a good school district, as it may increase your resale potential.

If you are in the market for a single family home, you will likely be competing with offers from couples who have a double income. Single people often feel daunted by this, as they think a couple will automatically have more purchasing power. But a double income does not necessarily translate into twice the money -- a couple may also have twice the debt and twice the expenses. To help, get pre-qualified for a mortgage before you start looking. This will help you know exactly how much house you can afford and will add weight to any offer you make.

Don't let down payments get you down
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. If you are single and shopping, a 15 to 20 percent down payment may seem like an insurmountable hurdle. But 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.

Don't forget to research groups like Fannie Mae and Freddie Mac, as well as government organizations like the Federal Housing Administration, to learn about programs that can help you secure a mortgage or buy a home with a down payment below five percent.

Housing alternatives
As a single buyer, you don't need to limit yourself to single family homes. Consider the advantages of purchasing a town house or condominium, where structural repairs and other maintenance tasks are handled by the condominium association.

Cut expenses
If you are not quite ready to make the full mortgage payments yourself, there are ways to reduce your costs in the first few years and grow into homeownership. Consider these options to make your dream home affordable:</sup>

• purchase with a family member. If you buy a house with your sister or uncle, you may be able to get a larger home. Remember that you should work out details with your relative before purchasing -- do you both want 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 and get a roommate. You can charge the roommate a reasonable rent to help you pay the mortgage. If you buy a single family home, you can rent out a room or a basement apartment. Alternatively, you can live on one floor and rent out the rest of the house, allowing you to grow into the home as your needs increase. 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 a lot of repair, and fix it up yourself. If you don't have much money for repairs, spread them out over several years, beginning with the most essential fixes. Make sure you know how to spot a fixer-upper -- you don't want to wind up with a money pit.