How to afford a home on a single income

Buying a house is an exciting prospect for anyone. But buyers purchasing a house with a single income can have special challenges. The good news is that buying a house on your own is possible. Whether you make this purchase on your own, buying a house marks a major milestone in your financial journey. But it’s especially impressive to finalize a home purchase with only your name on the deed.

Let's explore what you need to know when buying a home with a single income.

Key takeaways:

• When applying for a mortgage, those with a single income go through the same process as applicants with co-borrowers. But buyers with a single income handle all of the mortgage documents on their own instead of sharing that responsibility with a co-borrower.
• If you are applying on your own, mortgage lenders will still consider your income, credit score, and more when evaluating your application.
• As you navigate the home buying process solo, it’s helpful to get familiar with what you’ll need for a successful application.

Home buying trends for singles

A National Association of REALTORS^® housing trends report found that single women made up 20% of home buyers in 2024, and single men made up 8% of home buyers. This means nearly 30% of all homebuyers were single.

Homeownership among single women isn’t a new trend. NAR reports show that single women have outpaced single men in homeownership since 1981 – and more and more women have taken the plunge into homeownership in the past couple of decades.

Why do single women own more houses than single men? More educational and workforce opportunities for women may drive the rise of single female homeownership. Today, more women than men are earning college degrees, which leads to higher-paying jobs and increased earning power to buy a home.

Women also make up 24% of all first-time homebuyers while men make up 11% of this group. Overall that means 35% of first-time buyers who likely have a single income they use to help qualify for mortgage.

How to buy a home on one income

If you’re a single person buying a home, affordability can be a significant hurdle. While saving for a down payment with a single income feels challenging, strategies exist that help simplify the savings goal and buy the home you want.

1. Build your credit

Most lenders require a credit score of at least 620 for conventional mortgages.

When preparing to buy a home, check your credit score and review your credit report. If your score is low or you notice errors or issues on your report now is the time to take action to fix your credit.

Some strategies to build credit include making on-time bill payments and paying down credit card debt. To maintain your credit score after applying for a mortgage, avoid taking on new lines of credit while you wait to qualify for a home loan.

2. Save for a down payment

You know that you need to save for a down payment. But how much should you save?

There was a time when 20% of the purchase price was the standard down payment expectation, but that is no longer the case. Below are some of the down payment options associated with several loan options:

• Conventional loan which may require a down payment of 3%.
• FHA loans which you may qualify for with a down payment as low as 3.5%.
• Jumbo loans with some lenders accepting a 10% down payment in rare cases.
• USDA loans for rural homebuyers may require no down payment.
• VA Loans for qualifying veterans, active-duty service members or surviving spouses, which may not require a down payment.                                                                                                                            

Take some time to explore your loan options. While putting less down upfront might get you into a home, you’ll likely face a larger monthly mortgage payment. But if you can afford a larger down payment you may enjoy a lower monthly mortgage payment.

Once you know how much you want to commit for a down payment, it’s time to build your down payment fund. Some strategies for building up your down payment fund include:

• Setting up an automatic transfer from your paycheck to a dedicated savings account.
• Cutting back on discretionary spending.
• Picking up extra income with a side hustle.

As you save for this big goal, don’t be afraid to get creative on your savings strategies. Remember, cutting out a discretionary expense or working longer hours doesn’t have to be a long-term commitment. Instead, these measures might give you the chance to build up a down payment before your home purchase. After you reach your savings goal, you can choose to readjust back to your previous spending and work patterns.

3. Set your budget

Before you start scrolling through home listings, it’s critical to determine how much house you can afford.

You can use one of many affordability rules to estimate your house budget. According to the 28/36 rule, buyers shouldn’t spend more than 28% of their gross monthly income on housing costs. These costs include your monthly mortgage payment (principal and interest), property taxes, homeowners insurance and a homeowners association fee (if applicable). The guideline also suggests keeping your total monthly debt costs under 36% of your monthly gross income.

Since you may be the only one paying the mortgage, unless you decide to take in a renter, you’ll want to have a healthy emergency fund to carry you through any unexpected hardships. This can include unexpected repairs or improvements, possible job changes or other unplanned costs.

If you run into unexpected expenses years down the line, a home equity loan, home equity line of credit (HELOC), a cash-out refinance, or a home improvement loan may be a way to handle these bills, but having savings on hand will give you more choices in how to manage any situation that comes up. Depending on the real estate market at the time, you may not have enough equity to cover your needs, so an emergency fund is always your best line of defense.

Use a home affordability calculator to run the numbers and estimate your ideal home price for your situation.

If the home you can afford is less than what you anticipated, get creative with your housing search. You may need to focus on finding a house that suits your needs instead of hitting a wish list of your wants.

4. Choose the right home

While just about everyone has a picture in their mind of what they think their dream home would look like, you may have to make choices between needs and wants while sticking to your budget. As a single person, you may have a smaller amount of money to spend but you can also be more flexible. You may be able to consider a two-bedroom condo or townhome as purchase instead of a three-bedroom house since your need for space will be smaller. You could also consider renting out a room to help with housing costs. As you build equity you can work toward buying a larger property later, if that’s your goal.

Before you tour any homes, it’s important to get preapproved for a mortgage. A preapproval broadcasts to real estate agents and sellers that your home purchase offers are serious. A mortgage preapproval can give you the backing to move quickly when you find the right property.

Considerations for buying a house solo

Everything we’ve covered so far applies to all aspiring home buyers. But let’s explore considerations unique to buying a home as a single person.

Personal safety: A crucial consideration

All home shoppers should prioritize their safety. But as a single person who may be living alone, it’s a critically important consideration. Keep your comfort level front and center as you shop for a home. Research neighborhood crime rates and consider enhancing your safety with a home security system and features such as outdoor lighting.

To get a better feel for an area, visit the home at different hours of the day. Check out local online forums or go offline and talk to your potential new neighbors.

Current lifestyle

The home you buy now should match your current lifestyle. Your lifestyle will likely be a key factor when considering where you want to live. For example, you’ll need to choose between living in the middle of a busy city, the quiet expanse of a rural area, or somewhere in between.

You should also consider how the home will fit into your schedule and what it may demand of your skills and resources. Do you want a turnkey property or a fixer-upper? Are you interested in a starter home or a forever home? Do you have the time or money to maintain a big yard? Your answers to these questions can guide you to a property that aligns with your lifestyle.

Future life changes

Because a home is a long-term financial commitment, you should also think beyond your current lifestyle and consider your future plans.

Here are some considerations to keep in mind while house hunting:

• Marriage: Marriage or domestic partnership could impact your homeownership plans. A home is a major asset. Consult a real estate attorney who specializes in marriage law to ensure your interests are protected.
• Children: If you see children in your future, consider purchasing a home with more bedrooms or paying attention to the schools in your area.
• Roommates: A roommate can help you cover homeownership costs. If you want a roommate, look for a layout that would work for you and your future roommate.
• Rental income: If you want to generate income from your home, renting provides financial flexibility. Consider multifamily homes while you search and get familiar with short-term rental laws in your area.

Pros and cons for single homeowners

Buying a home solo can have advantages and disadvantages. Here’s what you should keep in mind:

Pros

Buying a house can offer these benefits:

• Building equity: Building equity allows you to build your net worth through real estate.
• Financial security: If you get a fixed-rate mortgage, the static monthly mortgage payment can help stabilize your homeownership costs and make budgeting easier. Homeowners don’t have to worry about a rent increase – and their monthly housing payment goes toward owning the home.
• Privacy: Financial perks aside, homeowners often enjoy increased privacy. Homeownership can offer a reprieve from noisy neighbors or other issues.
• Independence: As a homeowner, you have total control over your space and the final say over any repairs and renovations.

Cons

You may encounter these drawbacks:

• Difficult to qualify for a loan: A single income can make it more challenging to qualify for a mortgage.
• Financial commitment: A mortgage is a long-term financial obligation. Even after the mortgage is paid off, you’ll still have homeownership expenses, such as property taxes and homeowners insurance.
• More responsibility: You can’t call the landlord if something goes wrong. You’re solely responsible for maintaining and repairing your home.
• Less flexibility: Homeownership offers less flexibility than renting, potentially making it harder to travel, take a new job in a different area, or move. If you aren’t ready to commit to a particular area, homeownership may not be the right move right now.

The bottom line: Homeownership is within reach on a single income

As a single person, homeownership can be a financial game changer. It’s a great way to stabilize your finances and your living situation. As you prepare to buy a home, you will have to carefully manage your credit, emergency funds and down payment, since only your income and financials will be considered when applying for a mortgage. It may seem like a big leap, but it’s one you can manage with one income.  Assess your finances and credit history and consider how to make a home purchase the right move for you.

If you’re ready to move forward with homeownership, apply for initial mortgage approval to get started.