The mere thought of buying a first home can be just as daunting as it is exciting. As a single mother, the thought of buying a first home can be fraught with even more concern, because the buck literally stops with you. Can you afford the mortgage? Can you get a mortgage at all? What are your best options? Are there mortgage companies that understand the struggles of single mothers and are willing to be flexible in terms of payment, length of loan, and other factors?
The first thing you should do before approaching any home lender is understand your credit report and take steps to improve it if necessary. The better your credit score, the lower your interest rate might be — and when you see the truth in lending disclosures that explain just how much your interest rate will cost you over time, you will be glad you did!
However, if your credit score is very bad, don’t fret – you can still get a mortgage. Doing so might mean you have a higher interest rate, but over time your credit score will probably get better, and within five to ten years you will be in a strong position to refinance.
Bad credit mortgage companies can help you get a loan, but they absolutely require proof of a steady job that pays you on a regular basis. They have to know you will be able to pay the mortgage back. They often prefer that you have been in the same job for three years, proving your longevity. If you have been there for even longer and your position is one that would be hard to replace, that’s even better. They will be willing to place their trust in you if you can prove to them that you have been trustworthy to an employer.
Federal mortgage programs are always a good option. Some of them are designed specifically with a one-income household in mind, and will help you get pre-qualified for a loan, so you know exactly what you can afford and when you can afford it.
The U.S. Department of Housing and Urban Development (HUD) is also a good option for single mothers. HUD often purchases foreclosed homes from banks and sells them at base market value as quickly as possible. This helps more people find homes in their price range.
For more information on these programs, visit the website at www.hud.gov. You can find information specifically for single mothers that explains what you can afford and what they can offer.
A final word of caution: Avoid predatory lenders. Those who promise you can get into a home with no money down and a low interest rate might not be legitimate. Check them out with the Better Business Bureau and real estate agents in your area to determine whether or not they are worth your time – or whether they are a scam just waiting for you to take the bait.
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