Guide To Buying A Home Together Before Marriage

Purchasing a home is a significant milestone, whether you’re doing it with a partner before marriage or as a single parent. Each path presents unique challenges and opportunities. This guide aims to provide clear, accessible information to help you navigate the home buying process, understand available assistance programs, and make informed decisions.

Buying a Home Together Before Marriage

Understanding the Process

Buying a home with a partner before marriage is increasingly common. In fact, 16% of first-time buyers are unmarried couples, a significant increase from less than 1% in 1981 .

Financial Considerations

• Joint Mortgage Applications: Lenders assess the credit, income, and assets of both applicants. A strong financial profile from both partners can lead to better loan terms .
• Unequal Contributions: If one partner contributes more to the down payment, it’s essential to document this to avoid future disputes.

Legal Protections

• Cohabitation Agreements: These legal documents outline each partner’s rights and responsibilities, including what happens if the relationship ends .
• Title Ownership: Decide whether to hold the title as joint tenants (equal ownership) or tenants in common (specific shares), which affects inheritance and sale proceeds.

Buying a Home as a Single Mom or Single Parent

Single Mom First Time Home Buyer

Being a single mom first time home buyer comes with unique challenges, but various programs and strategies can make homeownership attainable.

Assessing Your Financial Situation

• Income and Expenses: Calculate your monthly income and expenses to determine how much you can afford for a mortgage payment.
• Credit Scores: A credit score of at least 580 is typically required for FHA loans, while conventional loans may require higher scores .

Exploring Loan Options

• FHA Loans: Backed by the Federal Housing Administration, these loans require a minimum down payment of 3.5% and are accessible to those with lower credit scores .
• VA Loans: Available to eligible veterans, active duty service members, and surviving spouses, VA loans offer benefits like no down payment and no private mortgage insurance .
• USDA Loans: For properties in eligible rural areas, USDA loans offer 100% financing with no down payment requirement .
• Conventional Loans: These loans may require higher credit scores and down payments but can offer competitive interest rates .

Down Payment and Down Payment Assistance

Saving for a down payment can be challenging, but assistance programs are available:

• Grants: Some programs offer grants that don’t need to be repaid, helping cover down payment and closing costs .
• Forgivable Loans: These loans are forgiven after a certain period, provided you meet specific conditions, like living in the home for a set number of years .
• Deferred Payment Loans: Payments are deferred until you sell or refinance the home, easing initial financial burdens .

Assistance Programs

Various assistance programs cater to single parents:

• HOME Investment Partnerships Program: Provides funding to states and localities to create affordable housing for low-income families .
• Family Scholar House: Offers support services and housing for single parents pursuing higher education .
• Local Programs: Cities often offer down payment assistance to single parents and first-time buyers.

Preparing for Homeownership

Homebuyer Education

Taking a homebuyer education course can provide valuable insights into the home buying process, budgeting, and maintaining your home. Many assistance programs require completion of such courses .

Child Support and Income Considerations

When applying for a mortgage, child support can be considered as part of your income, potentially increasing your borrowing power. Ensure you have documentation to verify this income.

Existing home vs. new construction

Decide whether to purchase an existing home or new construction:

• Existing Home: May be more affordable and located in established neighborhoods.
• New Construction: Offers modern amenities and fewer immediate repairs but may be more expensive.

Qualifying for a Home Loan as a Single Parent

Home loans for single and mortgage programs

Single parents often rely on home loans for single individuals that come with flexible requirements and support. These mortgage programs include:

• FHA loans: Backed by the Federal Housing Administration, these loans are a top choice for many single parents because of their lower credit score requirements and small down payment.
  Learn more from HUD
• VA loans: If you’re eligible as a veterans affairs participant, active duty service member, or surviving spouse, you could qualify for a loan with no monthly payments toward private mortgage insurance.
  Learn more from the VA
• USDA loans: Available for rural and some suburban areas, USDA loans offer 0% down payment requirement options with government support from urban development agencies.
  Learn more from the USDA
• Conventional loans: Though not government-backed, these loans may work well for single parents with strong credit scores and reliable income. They often require private mortgage insurance if the down payment is less than 20%.

Factors That Affect Your Loan Application

When applying for mortgage loans, lenders review your:

• Credit history: This includes your credit score, outstanding debt, and payment history. Many loan programs have minimum score thresholds.
• Income sources: Steady employment helps, but child support, rental income, and alimony can sometimes count toward your total income. Documentation is key.
• Debt-to-Income (DTI) ratio: This shows how much of your income goes toward debt. Lower ratios improve your chances of getting approved.
• Loan amount vs. income: You must qualify for a maximum loan amount based on your earnings and obligations. Lenders will not approve loans beyond your ability to pay.

Budgeting for the Full Cost of Homeownership

Down payment requirement and closing costs

Even with help from payment assistance programs, you’ll need to plan for upfront expenses:

• Down payment: Programs like the National Homebuyers Fund and state-specific aid can reduce or eliminate this requirement, especially for first time buyers and single mothers.
• Closing costs: These include loan origination fees, title insurance, and appraisals. Typical closing costs range from 2%–5% of the home’s purchase price. Some participating lenders may offer to roll these into your loan amount.
• Mortgage insurance premiums: Required for many government backed loans, these premiums protect the lender if you default. They’re common with FHA loans and conventional loans with low down payment amounts.

Monthly Costs to Consider

• Monthly payments: Include principal, interest, property taxes, homeowners insurance, and mortgage insurance.
• Utilities & maintenance: Budget for things like heating, water, repairs, and upgrades. Many first time homebuyers underestimate this.
• Childcare or school expenses: If you’re a single parent, these costs will need to stay balanced alongside home expenses.

Finding Help: Where to Start

Assistance programs and government programs

Start your home buying journey by researching assistance programs near you. Look for:

• State Housing Finance Agencies (HFAs): These agencies offer local government programs for affordable housing, forgivable loans, and payment assistance.
• Public housing authorities: Some public housing residents can transition to ownership through special programs tailored to low-income families.
• Nonprofits & Credit Counselors: Many offer free guidance and access to homebuyer education courses. Taking a homebuyer education class is often a requirement for receiving financial help.

First time homebuyer and repeat buyers

Even if you’ve owned a home before, you may still qualify as a first time homebuyer if you haven’t owned a primary residence in the past three years. These rules allow many single parents, former spouses, and surviving spouses to re-enter the market with help.

Repeat buyers may also benefit from special mortgage products, though they might have fewer loan application perks than first time buyers.

Practical Tips for a Successful Home Purchase

Real estate agent and house hunt

A trusted real estate agent can help you house hunt within your budget, especially if you’re working with payment assistance programs or a single income.

• Ask about experience with single parent home loans or buyers using government backed loans.
• Make sure they understand your priorities — school zones, commute times, or being close to family support.

Careful planning and financial preparation

• Get pre-approved before shopping. This shows sellers you’re serious and helps you stick to your maximum loan.
• Save for emergencies. Unexpected costs can come up even with the best planning.
• Consider your long-term needs. Will your kids need more space in a few years? Does the neighborhood offer support and services for single parents?

Building Equity and Stability

Buying a home isn’t just about shelter — it’s about creating a stable future.

• You begin to build equity from the moment you start making monthly payments.
• A home can offer stability for your children and a path to home ownership wealth over time.
• It can also mean a fresh start, especially for single moms, single mothers, and anyone coming out of a divorce or difficult financial situation.

Key Takeaways for Single Parents and Unmarried Couples

• You don’t have to be married to buy a home — but it takes careful planning, especially if you’re buying with a partner or on a single income.
• There are many loan programs, assistance programs, and government programs designed to support first time buyers, single moms, and public housing residents.
• With education, support, and the right team, you can become a confident, informed home buyer.

Get Help if You Need It

When buying a house together while not married, it's a good idea to get a lawyer, agree on who is going to pay for that lawyer and have that lawyer create a formal written agreement that protects everybody’s best interest. Then sign that agreement in front of witnesses.

Whether you're buying a home as a couple or going solo, get home buyer counseling and education right from the start so you know you're getting into and have the maximum chance for success.