How to Buy a Home When You’re Single

With home prices consistently increasing year over year, it’s challenging to afford a home without two incomes. But with the right strategy, tenacity, and patience, you can go it alone and start enjoying the benefits of building equity. To help you make it happen, Maleno highlights six tips to help you buy a home when you’re single.

1. Build Your Credit

When you eventually apply for a mortgage, a lender will approve you based on your financials alone. One of the core factors they’ll evaluate is your credit score. Most lenders like to see a 620-670, but different types of mortgages have varying minimum requirements. For instance:

Building your credit history doesn’t happen overnight. In fact, it takes years. But that’s only if you’re starting from scratch. Most people (74 percent) have at least one credit card.

As you add more credit accounts (e.g., credit cards, auto loans, personal loans, and student loans) and use them responsibly, you'll generally see an increase in your credit scores, and your credit profile will signify that you’re a good candidate for a mortgage. If your credit score is currently less than stellar, be sure to:

Pay Bills on Time:

Payment history is the most important factor in calculating your credit score. Pro-Tip: Set up automatic payments to ensure you never miss a due date. By doing so, you’ll build a record of on-time payments.

Keep Credit Utilization Low(ish):

The amount of credit you use compared to your total credit limit is a major factor in your score. Keep your usage below 30 percent. Consistently aim to pay more than the monthly minimum. Eventually, the goal should be to pay off your full balance each month.

Keep Old Accounts Open:

The length of your credit history also impacts your score. Keeping older, paid-off credit card accounts open will help maintain a longer average credit age.

Avoid Unnecessary New Credit:

Unless you’re still trying to establish a credit history, you want to avoid "hard inquiries," which occur when you apply for a new credit card or loan and can temporarily lower your credit score. Lenders typically prefer to see at least five active credit accounts.

Regularly Check Your Credit Report:

You can get a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) at AnnualCreditReport.com. Many credit card companies and online sources (e.g., Experian, Equifax, and TransUnion) also give you free insights into your credit.

Please note: Many people believe checking your credit score can actually lower it. This is not true. The confusion likely originated from a misunderstanding of a "hard inquiry," which occurs when a lender checks your credit when you apply for a new credit card or loan. However, checking your own credit score or report is a soft inquiry and does not impact your score at all.

Pay Down Debt, Strategically:

When it comes to paying off debt to position yourself for buying a home, start by paying off any past-due accounts first, as these are the most damaging to your credit history.

Next up, list all of your debts from the highest to the lowest interest rate. Put extra funds toward the one with the highest interest rate and make minimum payments on all other debts. When the highest interest rate debt is gone, roll the entire payment amount to the next highest debt on the list.

This strategy is known as the “avalanche method” of paying off debt. Repeat this process until your debt is paid off.

2. Start Saving

There is little benefit to investing more into your savings if you’re paying interest on credit card debt. Reason being, even a good savings account pays only three to four percent interest on your money. Conversely, most credit cards charge interest rates between 21 and 24 percent. Therefore, if you’re “saving” while you’re still paying off credit card debt, you’re actually losing money each month.

Once you’re paying your entire credit card balance each month, you’re good to start saving. If purchasing a house in the next one to five years is your goal, you’ll want your money to grow safely, remain accessible, and retain value. Some of the best options for savings include:

• High-Yield Savings Accounts
• Money Market Accounts (MMA)
• Short-term Certificates of Deposit (CDs)
• Treasury Bills (T-Bills)

If your timeline is closer to 10 years, stocks can be helpful for long-term growth, but know that returns are not guaranteed. If you have a longer time horizon, consider equities as part of your overall portfolio, not the sole strategy for growing your savings.

3. Make Lifestyle Changes

Lifestyle shifts can make a significant difference in how quickly you build savings. To avoid feeling overwhelmed by all the changes, it’s helpful to implement them one at a time over several months.

• Automate Savings: Set up automatic transfers to a dedicated savings or investment account each payday.
• Cut/Reduce Recurring Expenses: Audit subscriptions (streaming, apps, gyms) and cancel what you don’t use often.
• Find More Affordable Options: Negotiate or switch providers for insurance, phone, and internet.
• Cook More at Home: Eating out is one of the biggest budget drains. Making your meals at home is cheaper (and often healthier).
• Set A Fun Budget: Keep savings sustainable without feeling deprived by giving yourself a set monthly amount to spend on meals, entertainment, and discretionary expenses.
• Shop Strategically: Make and stick to grocery lists, and practice the “24-hour rule” when making non-essential purchases to help reduce impulse buying.

The key is consistency. Even small changes, when stacked together, can add hundreds of dollars a month to your savings.

4. Find Ways To Boost Income

Ultimately, money is the key to homeownership. Accordingly, finding ways to make a little extra income is crucial for individuals who are house shopping on their own. It’s part of the reason why roughly one in four people have a “side hustle.” Pair these extra funds with cutting expenses and a savings strategy, and you can fast-track your way toward buying a home. Get started by:

• Freelancing (writing, designing, programming, marketing)
• Doing gig work (rideshare driving, food delivery, pet sitting)
• Working overtime or extra shifts
• Find part-time work (seasonal or weekend jobs)

Side hustling isn’t the only approach to boosting income. While the majority of people (58 percent) feel apprehensive about requesting a pay increase, even a five percent raise at your current job can add up significantly over time.

5. Apply for First-Time Homebuyer Grants & Programs

There are federal, state, and local programs specifically designed to help first-time homebuyers purchase a home with less cash up front. For instance, if you’re trying to buy a home in Erie, Pennsylvania, you may want to consider applying for the:

• Sisters of St. Joseph Neighborhood Network (SSJNN) Genesis Home Program
• PA Department of Community & Economic Development HOME Investment Partnerships Program (HOME)
• Marquette First-Time Home Buyer Program
• Erie Bank “Open Your Door” Mortgage Program
• Redevelopment Authority of the City of Erie ARP Healthy Homes Program

No one likes to do extra paperwork, but leveraging these programs can result in thousands of dollars in assistance. Also, the application process is easier than you might think.

6. Buy Below Your Means

It’s important to remember that your first home doesn’t have to be your forever home. Buying below your means allows you to cover unexpected expenses, continue saving, and add value to your home once you've moved in. When you’re house shopping, consider older homes and fixer-uppers with good bones, smaller homes, and homes just outside of your desired neighborhood.

Finding Help When The Time Comes

The path to homeownership can take years, but it’s a journey worth taking. As the time comes to make that big purchase, make sure you have a real estate professional by your side who can find a home that fits your budget, provide guidance, and negotiate on your behalf. When you’re ready, reach out to Maleno to start your home search.