Hey IMs! I’m wanting to buy a house, but just wondering if anyone has been successful as a single parent of 3 kids? I work full time, and only have a car loan and small credit card. I don’t live in a highly priced area but it’s not really cheap either. I’m tired of renting and being at the mercy of landlords and just want to be able to do what I want to my house (paint it whatever colour, let my pets inside, plant whatever plants I want, etc). I guess I’m just looking for some positive stories while I wait to speak to a broker. Thanks :-)
4 Replies
Nothing is impossible but unless you earn a 6 figure income and have a 20% plus deposit you will struggle. Sadly having 3 children will reduce your borrowing power significantly and the car loan & credit card would probably need to go.
I did it with a 10 percent deposit, not close to six figure salary but only have one child.
I had no credit cards and no car loan.
As has already been said pay off and close the credit card. Even if there is nothing owing on it the liability is calculated on the card limit not on how much you owe on it. Pay off the car. If this is not possible have you got family that can help you out. Pay them the money back instead that way it's not on any books and it's not taken into account in your calculations but make sure you can still afford all the repayments yourself without taking it into account on the home loan expenses.
The other thing to consider is if you have any family that will go guarantor on the loan to help you get a better foot in. But you need to be able to guarantee you can afford to pay the repayments because otherwise it's their property that is on the line if you default.
The other thing is to work out your own budget down to the little things. Make sure that whatever they offer you you can afford the repayments on and take into consideration that when you own a house ALL repairs are your expense. Yes it's nice to think about doing the good stuff for yourself like painting and gardens but you have to do all the bad stuff too like pest control, pipe repairs, electrical repairs plus council rates and water rates where you only pay usage atm for water as a renter.
with 3 kids you need to consider also that you might be stuck there for 20 years so you'll need a place big enough for all the kids to grow even if you think they can share rooms and be in each other's space now.
Good luck hope you can work it out as it's not impossible but it will be very tight for a while.
I did it with 2 kids, was earning around $60-70k a year, had savings and no debt. Definately possible but get rid of credit card and car loans before you apply. If you haven't read the Barefoot Investor have a look at that too, it helped me.
Also be aware bank will want 3 months of statements, so make sure to clean up spending habits and show consistent savings. Rent can be included to show evidence of capacity to pay.