Whether you are a widow or a divorcee first-time home buyer, lenders of a home loan or mortgage can’t deny or reject your application because of your relationship status. However, the ugly truth is that your relationship status can hurt or help your chances of qualifying for a mortgage.
So if you are a widow or a divorcee, or even a single mom, let’s take a look at how your relationship status matters:
Widow or a Divorcee
When you apply for a mortgage loan as a widow or divorcee, the lenders will consider your debts and monthly income to determine if you can afford a mortgage. For example, they’d carefully look at your monthly spending or income affected by alimony, child support, or benefits. These payments will factor into the debt-to-income (DTI) ratio.
Your DTI should not exceed 45%. If it does, then the lender may rethink their decision, and you might find it challenging to find a lender that approves you for a mortgage loan. There are certain exceptions, but you will have to check with your lender.
Likewise, it can be tough to become a first-time homebuyer as a single mom. It all comes down to your income, your debt, and your ability to repay. This is true for all borrowers, not just single moms.
The good news is that if you’re a widow or a divorcee first-time home buyer, or even a single mom, you have the power to apply for a mortgage and become a homeowner. There are several mortgage loans that could help you become a homeowner. Here’s a quick overview of the options you may have (regardless of whether you are divorced or widowed):
FHA Home Loan
FHA Home loan, also known as the Federal Housing Administration loan, has a lower interest rate. This makes it easier for single moms to opt for. Besides this, the down payment is only 3.5 percent, making it relatively affordable.
Wait, there’s more; you don’t need an excellent credit score to qualify for the FHA Home loan. A minimum of 600 credit score and sometimes even 580 is acceptable by most lenders.
VA Home Loan
If you are a veteran widow and a single mom, you may be eligible for a VA loan. This could be the best program for you to pursue your homeownership dream. Here’s why:
Firstly, there is no down payment requirement. So, you don’t have to make any payment right off the bat. Next, the mortgage loan is 100 percent backed by Department of Veterans Affairs. You also don’t have to worry about private mortgage insurance. All this truly makes it a viable option for first-time homebuyers who are widowed and single moms.
Conventional Home Loan
Many are under the misconception that you need to save up 20% for a down payment, but that’s not true any more. You can come in with as little as 3 percent down for a conventional home loan. You will have to pay Mortgage Insurance, but you’ll be able to become a homeowner with a minimal down payment.
As a first-time homebuyer widow or a divorcee, we are here to help. For more information or service assistance, contact us. We can help you evaluate your options and select the one that suits your needs the best.