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YOU’LL NEED A WEDGE TO HANG THAT DOOR
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  1. Home
  2. Property

How to buy a home when you’re single

It is possible. - by Laura Barry
  • 21 Oct 2019
How to buy a home when you’re single

Buying a home is one of the largest financial commitments many people will ever make in their lifetime, and it’s a purchase that many people believe cannot be done by one person on one salary. However, with the proper time, dedication and research, anyone can buy a home on their own – regardless whether they’re coupled up or not!

We spoke to financial advisor Helen Baker about how to buy your home as a single person.

Are there any schemes available to help a single person save for a home?

“A lot of those motivating schemes no longer exist and some that are promoted by sales agents make me nervous,” says Helen. “One to consider is the First Home Buyers Scheme using superannuation.  The scheme allows you to access salary sacrificed contributions you made in previous years for the purpose of your home deposit, but it must be your first home.”

“The scheme started from the first of July, 2017, so for many this could be more than two financial years of contributions.  The maximum you can take out is $30,000.”

“Remember the devil is in the detail so seek advice from your financial adviser.”

woman looking at laptop
Getty

What is the first issue a bank may flag with you when trying to apply for a home loan as a single?

“There is no difference between whether you are a single person or a couple, other than you have some economies of scale as a couple, such as the possibly of double the income than someone who is single,” says Helen. “Therefore, technically you should be able to borrow more as a couple than a single person.”

“Whether single or a couple, the lenders are looking at your credit history and your ability to pay the loan back.  With the new “responsible lending” criteria, it is definitely tougher to borrow.  The first thing they will head for is your credit score.  If you have poor credit rating through lots of loan enquiries, existing debts, bad history (arrears/defaults/bankruptcy) or a “busy” history, then time and better behaviour is your backup plan.”

Do lenders look at single men and women differently when applying for a home loan?

“There is no discrimination on a gender basis.  The issue is probably more around the gender pay gap.  With men earning more than woman, they are likely to be able to generate a bigger deposit than a woman and also borrow more money, as they have a greater capacity to repay the loan.”

“Broadly speaking it is the 5 C’s of credit: character, capacity, collateral, credit, conditions,” says Helen.

 Are there any traps a single home purchaser should be aware of falling into?

“The old saying ‘if it is too good to be true, then it probably is’,” says Helen. “Be aware of those who have a potential conflict of interest, such as buying a property where they setup the finance for you.  What rate would you be paying?  How do you get out of the loan if the rate is bad, as interest rates can go up? How well is the property built?  We have all seen the issues of recent building collapses,” says Helen.

“Watch your spending, as people spend a lot more than they think they do and particularly when they get their own home because they want to put their own stamp on it – renovations are classics for overspend.”

Other top tips from Helen to financially secure yourself include having an emergency fund in case you lose your job, and ensure you have income protection and all other relevant insurances - see your financial adviser about what is right for you.

Note this is general advice only and you should seek advice specific to your circumstances.

Want to avoid buying in Australia's most expensive suburbs? Watch the video below. 

  • Property
  • Finance
Laura Barry
Laura Barry
Laura Barry is a writer, bookworm and interior design enthusiast with a love for reporting on all things homes, travel and lifestyle. When not tapping away at her keyboard, Laura can be found making endless cups of tea or perusing the shelves of Sydney’s many bookstores.

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YOU’LL NEED A WEDGE TO HANG THAT DOOR
Watch 6:32

YOU’LL NEED A WEDGE TO HANG THAT DOOR

{headline}

{headline}

5 legal ways to reduce your capital gains tax on investment property

5 legal ways to reduce your capital gains tax on investment property

How you can save money on your home loan by going green

How you can save money on your home loan by going green

This is how long it takes to save a home deposit in Sydney

This is how long it takes to save a home deposit in Sydney

The potential property hotspots for 2020

The potential property hotspots for 2020

{headline}

{headline}

The January 2020 changes all first home buyers need to know about

The January 2020 changes all first home buyers need to know about

Why you should reconsider hosting an open house inspection

Why you should reconsider hosting an open house inspection

The first mistake all first homebuyers make

The first mistake all first homebuyers make

{headline}

{headline}

Three things you should never do at an open house inspection

Three things you should never do at an open house inspection

Mortgage words first home buyers need to know

Mortgage words first home buyers need to know

How to choose the right home loan for you

How to choose the right home loan for you

Simple things you can do to increase the value of your home

Simple things you can do to increase the value of your home

How to keep your Airbnb property booked all year round

How to keep your Airbnb property booked all year round

3 ways to pay off your home loan faster

3 ways to pay off your home loan faster

Mistakes Australians make when preparing for retirement

Mistakes Australians make when preparing for retirement

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