Break the Glass Ceiling…and Install a Sky Light
Buying a Home When You're Female and Single
By Kara Stefan
aren't just breaking down barriers in the corporate world;
they're starting to blow the rooftops off the home buying
industry. In fact, over 52% of women-headed households in
the U.S. own their own homes, and single women constituted
the fastest growing demographic of first time home buyers
in 1998 and 1999.
Nonetheless, the prospect of buying a home on your own can
be daunting. But single mothers in particular should know
that buying a home can be a breeze compared to raising children
while working full-time.
Essential Facts of Home Buying
Can you afford to buy a home? Consider these two guidelines:
- Your monthly mortgage payment, including principal, interest,
real estate taxes, and homeowner insurance, should not exceed
28% of your monthly income before taxes.
- Your total amount of debt (mortgage, credit cards, car
payments, student loans, etc.) should not be more than 36%
of your gross income--this is referred to as your debt-to-income
If you're renting and these numbers surpass the recommended
percentages, you may be better off buying a home and taking
advantage of the interest deduction on your taxes.
By and large, whether you're single or divorced, the toughest
part of buying a house is coming up with the down payment.
However, the following resources are a good place to look
for mortgages requiring low down payments.
Fannie Mae: This type of mortgage features a loan-to-value
ratio of 97%, meaning you need only come up with 3%. Only
people with modest incomes will qualify for this type of loan,
and a pre-purchase homebuyer education class is required for
Federal Housing Administration (FHA): This government
agency doesn't offer mortgages, but it does insure residential
loans provided by private lenders. This means that once you
qualify for FHA insurance, you may buy a home with only 3%-5%
down. FHA-backed mortgages have a maximum loan limit depending
on the average housing cost in each region.
Veteran's Administration: Not an obvious choice for
women homebuyers, VA loans are nonetheless gender blind. If
you qualify, the VA guarantees mortgages up to $203,000--often
with no money down--and the financial requirements tend to
be less stringent than those of private lenders.
Rural Housing: Low-interest rate, nothing down loans
are available for qualified borrowers living in rural areas
who are unable to procure financing through traditional lenders.
You can find out more at your local Rural Housing Service
City/County Assistance Programs: Many cities and counties
offer down payment assistance programs for borrowers meeting
certain eligibility requirements. These are often called "silent
seconds," and they're actually loans offered at below market
interest rates made to help you come up with a down payment
and may not require any repayment until you sell your home.
Seller Financing: You may be able to find a seller
who will finance your mortgage. This often means paying a
higher interest rate and a "balloon note" (large lump-sum
payment at the end of a shorter time period), but it can keep
your payments low the first few years and provide financing
if you have poor credit.
Builder Incentives: If you're interested in new construction,
many builders offer monetary incentives that you may apply
to your down payment or pay down points to lower your interest
Don't be threatened by the word "qualified"--in most cases,
it only means you can't make too much money. What's more important
is that your debt ratio is under control and your credit is
The Online Revolution
Experts predict that over the next 5 years, at least 10% of
home mortgages will be obtained through online resources.
And the nice thing about online shopping is that it is largely
gender blind. Lenders no longer discriminate between men and
women--they're just looking for qualified borrowers.
The following Web sites offer a multitude of resources for
single women ready to break through the glass ceiling and
become homeowners on their own: