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Whether you are a divorcee, widow, or a single mom, lenders of a home loan or mortgage can’t deny or reject your application because of your relationship status. However, the truth is that your relationship status can hurt or help your chances of qualifying for a mortgage.
So if you are a first-time homebuyer widow or a divorcee, or a single mom, let’s take a look at how your relationship status matters:
Divorced
When you apply for a mortgage loan as a 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 on alimony or child support. Hence, these payments will factor into the DTI ratio.
Your DTI should not exceed 43%. 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.
Single Moms
Likewise, it can be tough to become a first-time homebuyer as a single mom. Lenders may question your ability to pay mortgage payments significantly when raising children and paying all the bills on your own.
However, the good news is that single moms have the power to apply for a mortgage and become homeowners in the US. There are several mortgage loans for single moms. Here’s a quick overview of the options you may have as a single mom (regardless of whether you are divorced or widowed):
FHA Loan
FHA 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 loan. A minimum of 600 credit score and sometimes even 580 is acceptable by most lenders.
VA 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. Plus, you 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.
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.