Can I get a home loan as a single parent?
03 December 2019
Getting approved for a home loan these days can be difficult for anyone, but what if you're a single parent on a single income? We sat down with home owner and single parent Rozi Hemara to get her tips, experiences and advice.
Do your research
Preparation is key – especially when it comes to something as complex as buying a home. Taking the time to do your research up front could help make the process much smoother in the long run.
“Don’t be in a rush if you can help it – taking time to research the steps of how to apply for and buy a house will alleviate a lot of stress. Know the lingo, general timeframes and who and what’s involved in the process,” Rozi said.
“Also make sure you’re familiar with the real estate market over time, not just when you’re thinking of or are actually buying.
“It can be exhausting but going to as many open homes as you can will give you a good idea of what you do and don’t want, and how much homes that tick your boxes are selling for. They’re also a great way to get the kids excited and involved – they’ll love sharing their opinions and choosing who gets which room!”
Ask for advice
Although going through the home buying process alone may feel daunting, chances are you have family and friends who have done this before and would be more than happy to share their tips and experiences.
“Find ‘experts’ within your circle of friends. I worked with a lady who owned seven houses and was able to ask her questions throughout the whole process,” Rozi said.
“Her advice was always reliable and trustworthy because she didn’t have anything to gain and had my best interests at heart.
“Once you’re a bit further along in the journey you’ll be surrounded by people with years of expertise in this area – your broker or lender, solicitor, real estate agent – so don’t be afraid to ask lots of dumb questions and always get them to clarify if there’s something you don’t understand.”
Save, save, save!
Food, clothes, new shoes, school fees, books, swimming lessons, haircuts – did we mention food? Raising children isn’t cheap and on a single income it can be hard to save. But patience is a virtue.
“Set up a budget and save as much for your deposit as you can – you’ll not only have to borrow less, which will decrease your monthly mortgage repayments, but you might also avoid having to pay Lenders Mortgage Insurance”, Rozi said.
“Be patient, you will one day have a home loan but the time before that when you’re saving will come to an end so make the most of it and save as much as you can.”
Know your limit
Being solely responsible for a home loan is no mean feat. A mortgage is a big commitment that’s with you for the long haul, so it’s important to take a good look at your income and expenses and determine how much you can realistically afford to pay each month.
“Not having a second income to fall back on if needed can be scary but the key is to not overcommit yourself,” Rozi said.
“This is especially important as a single parent, as unexpected expenses pop up all the time when you have kids, so you need to allow a buffer for these.
“Once you know your borrowing capacity you have a much clearer idea of what you can afford, and what you would be able to afford in the future if you keep saving.”
Suncorp’s Borrowing Limit Home Loan Calculator is a great way to get an idea of how much you could potentially afford to borrow and what the repayments will be. Though this amount won’t be exact, having even a rough idea of your borrowing limit can help to narrow down your property search and you’ll be more aware of your top bidding amount at auctions.
Make use of first home buyer benefits
First Home Owners Grant
The First Home Owners Grant is a one-off grant that offsets the cost of GST on home ownership for eligible first home buyers. It’s a national scheme, however the grant details and eligibility criteria differ from state to state.
First Home Super Saver Scheme
The First Home Super Saver Scheme allows eligible individuals to save for their first home via their superannuation fund. To learn more, visit the ATO website or contact your super fund.
First Home Loan Deposit Scheme
From 1 January 2020, the First Home Loan Deposit Scheme will assist up to 10,000 eligible first home buyers to purchase a house with a 5% deposit. The scheme could also save eligible first home buyers up to $10,000 in lenders mortgage insurance.
Suncorp’s offers for First Home Buyers
Buying a home as a single parent can be scary. Try to enjoy the process and not to stress and remember that with a little patience and planning your dream of owning your own home could become a reality.
- How to get a home loan when you’re on a single income
- What does the First Home Loan Deposit Scheme mean for you?
- 10 realistic money saving tips you can start now
Information is intended to be of a general nature only and any advice has been prepare without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement & Product Information Document before making any decisions about whether to acquire a product.