If you recently became a single parent and see your dreams being washed away because you feel all alone, you aren't alone. There are single parents that face future endeavors alone like dating again, living on one income, and buying the home they've always imagined. It is possible to do things on your own, be successful, and enjoy every bit of getting to where you want to be in life.
Being a single parent can be an everyday struggle but don't feel you have to give up your goals in life just because you are on your own. At some point in life, people think about moving whether it is into an apartment, condo, or type of house. With raising children you usually need a little more space than living alone so a house is an ideal spot for many families either single parent families or both parent families. Don't feel as a single parent that you wont be able to afford a house on your own. Here are a few guidelines to get you started on fulfilling your dreams.
Mortgage Lenders 3 Preferred Tests to Use to Determine House Budget
First you need to figure out how much money you can spend on a house. Look for prices of houses two and a half times your annual income. Mortgage lenders normally use these three tests so they make a good starting point to follow:
Test 1: The monthly house payment, including property taxes and insurance should not exceed 26 percent of your gross monthly income.
Test 2: All monthly debt payments plus the house payment should be no more than 38 percent of your gross monthly income.
Test 3: As the homebuyer you should have two to three months worth of paychecks in an emergency fund.
Lets look at an example to get a better understanding. Let's assume your annual income is $26,000. This would qualify you for approximately a $60,000 mortgage. The monthly principal and interest payment would add up to about $400 a month; taxes and insurance would then add up to another $100 to $150, depending on the area. Lastly if you put less than 20 percent down, you'll have to pay private mortgage insurance as well, making your total monthly payment come out to be around $575.
Your Cash Flow
Once you figure out how much of a mortgage you can qualify for your next step is to know your own cash flow. It's up to you to make sure you can make the monthly house payment, pay for child care and still look out for your long-term goals such as your retirement fund and your children's education. Be sure to track your spending for several months so you'll know how much you can spend on a house that really fits into your budget.
Houses don't come cheap and you'll have to figure the next expense, which is figuring in your taxes. Houses are often known as great tax breaks because mortgage interest and property taxes are deductible, but that is true only if you itemize.
Save!
Of course you are going to want to make sure to save wisely. Let's assume you find the house of your dreams and it just so happens to be a $64,000 house. You figure that you can put 5 percent down, or $3,200. With closing costs and not washing out your emergency fund, you'll need to save about $5,000. If you invest $100 a month in a conservative no-load mutual fund, you should reach your goal of $5,000 goal in five years.
So if you need to start saving up money to be able to afford a house, with a five-year timeframe, the best place to invest the money is in a mutual fund within a Roth IRA. Usually after five years, first-time homebuyers can pull out all their initial investments plus all the earnings of up to $10,000 tax-free.
Alternatives to Single Mother's Dream
Be sure to consider all alternatives. Five years may be too long to wait or $64,000 may or may not buy the house you've always dreamed of having. If you simply can't afford a house in the desired time you might like to consider other ways to obtain a home such as buying a home along with another family member or someone you can trust. You then could divide all costs, childcare, and chores that come with owning a home.
Take advantage of any tax breaks. If you are filing as the head of the household, claiming childcare expenses and the $500 tax credit for each child under the age of 17, you can save up to hundreds of dollars off your federal tax bill. With the assumed income bracket of $26,000 used before, it will make you eligible for an $850 earned income credit. Keep in mind this is one of the few times the IRS will pay you.
Last but not least keep in mind funding for your retirement.
With these guidelines in mind and examples given of how much money you need having a certain income, you can achieve purchasing the home you've always dreamed of. Stay motivated, don't lose hope and you and your children will live the dream you've always dreamed of having, your very own home!
Kathryn Spencer specializes in household budgeting tips and has long authored educational and support pieces for women and single mothers. Kathryn is a contributing author and editor to a variety of international and domestic web sites, and free newsletters. Kathryn lives in the southeastern United States with her two children Dylan and Kalie.
taxi from O'Hare Bismarck .. Lockport Chicago limo O’HareIt is widely written that you need 75% of your... Read More
As a parent you are bound to face a few... Read More
Are you having problems with debt? Are you afraid to... Read More
The price of gas continues to climb, and with continued... Read More
Between 15 - 20% of people in our country (UK)... Read More
Just about everyone has a checking account. Checks present easy... Read More
With the A-level results coming out, the long wait for... Read More
Of course, these don't have to be done in any... Read More
Well, dang! From what I've heard and read, it looks... Read More
Recent findings from the Educational Policy Institute indicated that the... Read More
I've been sharing the following idea with people for a... Read More
With a traditional Investment Retirement Account (IRA) you pay taxes... Read More
If you've developed a household budget to get your spending... Read More
If you've been to a shopping mall lately, you've probably... Read More
Car donations and used car donations are the way many... Read More
The first step to financial success lies in knowing your... Read More
We have heard a lot about consumers' personal information getting... Read More
It doesn't take much for you to get behind on... Read More
So, you've made the decision to apply for a credit... Read More
With the advent of the internet and especially auction services... Read More
During the last twenty years, banks have offered a number... Read More
At a time when the entire world's attention is focused... Read More
If you're like most people, your personal financial records are... Read More
I have to admit, I do it too. I complain.... Read More
Today many women are struggling with debt and it's even... Read More
Granger Lincoln Stretch limo rentals ..Would you be interested in freeing up 10% to 15%... Read More
If you die without making a Will in the UK,... Read More
Millions of people give a lot of thought to financial... Read More
I think most of us have at some point in... Read More
Millions of people have a checking account and many people... Read More
As a parent you are bound to face a few... Read More
Identity theft is a serious crime that continues to grow.... Read More
Commonly referred to as the first of the three major... Read More
Developing and living by a household budget is by far... Read More
The price of gas continues to climb, and with continued... Read More
An avid cyclist and bike racing fan, I sit transfixed... Read More
The judge had to ask the question, and we had... Read More
You no longer look at the pictures of homes cause... Read More
Chapter 7The potential chapter 7 debtor should understand that a... Read More
You have probably accomplished a great deal with your life.... Read More
Have you ever thought about what you are going to... Read More
1. Don't focus on your finances.The reason most people get... Read More
Would you know what to do if you suspect that... Read More
Are you having problems with debt? Are you afraid to... Read More
To save on food, be an opportunist. Buy what you... Read More
You should thoroughly consider your business needs when selecting a... Read More
There have been an estimated 9.9 million victims on America... Read More
It is possible to eat a healthy, balanced diet without... Read More
Sticking to a budget can be difficult, but with so... Read More
When you received an energy (heating) bill last winter, were... Read More
Personal Finance |