As far as a bank is concerned, two incomes are always better than one but it’s not always going to work out that way though. There are so many families that either have one income, or singles who want to purchase a house on their own.
Being a single parent is a tough job and can really stretch the budget, but that doesn’t mean you can’t buy a home of your own. Although be warned that there are some pre-conditions that should be met.
The Bank is interested in your capacity to repay the loan. Even with financial assistance, like parenting payments, you need to work if you want a mortgage.
If you’ve got an income, then there’s no reason why you can’t get a home loan. The question is how much you can borrow as a single income household. Many home loan lenders will accept an application from a single parent. Although the usual home loan eligibility criteria still applies. A deposit is required and the borrower needs to have an income. It’s also good if the borrower can show a history of savings.
Here are some of the reasons why you should still consider home ownership, if you’re a single parent or on one income:
- Home ownership provides stable housing for your family. Home ownership and stable housing go hand-in-hand. However, families who must move frequently may opt for more temporary rental options rather than home ownership.
- Buying is cheaper than renting over the long-term. In many parts of the country, rental prices are on the rise, and mortgages can be obtained for monthly payments that are actually lower than average rental prices in many areas. Not to mention, when you make a mortgage payment each month, you’re building equity that can later be turned into cash when you sell the property for a profit. Proceeds from the sale of a principal residence are also excluded from capital gains tax.
- If the value of your home rises over time and as you pay down your mortgage, you’ll build equity. Selling your home in a few years could earn you a profit, depending on market conditions, the value of your home and the remaining balance on your mortgage.
Want more information or tips for single parents who want to purchase their own home? Contact us for a FREE no obligation consultation on 03 8390 5855 or email firstname.lastname@example.org