Advantages and Disadvantages of Single Woman Homeownership

 Did you know that prior to 1974, banks would not give mortgage loans to single, widowed or divorced women unless they had a male cosigner, regardless of their income? Even with a cosigner banks would only give women partial credit for the income they earned. That's when the Equal Credit Opportunity Act was passed. 

Now, according to the National Association of Realtors 2018 profile of home buyers and sellers, single women homebuyers outnumbered single male homebuyers by 2 to 1. 

Via LendingTree, let's look at some advantages and disadvantages of homeownership for single women:

Advantages of homeownership for single women

• Gain autonomy. New York City Certified Financial Planner (CFP) Kaya Ladejobi of New York City-based investment adviser Earn Into Wealth notes that the autonomy and freedom women gain through homeownership can be extremely empowering. Having the freedom to live how and where you want can help women stay in control of their lives and their futures.
• Start building wealth. By purchasing a home, said Ladejobi, you can “have your housing dollars start working for you,” versus paying rent, which does nothing to build equity. By purchasing a property, you are making an investment that will hopefully increase in value.
• Stop wasting money on rent. Many times, your monthly mortgage payment can be the same as what you’re paying in rent — or less. LendingTree’s Rent vs. Buy Calculator can help you determine which is a better bet in your area.
• Gain more stability. Ladejobi said that homeownership is a great way to gain some stability in an often unstable rent environment. Your housing payment is likely your largest expense, and buying a home is a great way to take control. While your taxes and insurance costs may go up from time to time, Ladejobi said, the monthly payment on a fixed rate mortgage will remain fairly stable. And, when you buy, “you’re not at the mercy of rising rents or being priced out of where you live.”

Disadvantages of homeownership for single women

• You may be financially vulnerable. While investing in real estate can be financially savvy, buying a home on your own can leave you in a tough position if you lose your job or your income drops. “There aren’t a ton of safety nets if you don’t have a partner to help pick up the bills,” said Ladejobi.
• You may not qualify for the loan you want with one income. Having only one income can be limiting when it comes to qualifying for a mortgage. Since the amount of money you can borrow is dictated by your income and other factors, you may not be able to borrow as much as you wish you could and therefore not be able to afford that larger home.
• You may have less flexibility. A home can be a smart investment, but home ownership makes your life a lot less flexible. If you want to move, for example, you’ll have to sell your house first or risk doubling up on housing payments. This is a big departure from renting where you can pack up and move with no questions asked any time your lease ends.
• Buying a home is a huge financial commitment. In addition to coming up with a down payment and/or moving costs, there are additional financial considerations that come with buying a home. You’ll need to pay for upkeep and repairs, for example. If something breaks, it’s your job to fix it or pay someone to fix it for you.
• You may have more responsibility. Owning a home comes with a lot of responsibility and chores not everyone wants. You will need to complete or outsource household work like mowing the grass, landscaping, and basic upkeep and maintenance, for example.

Have questions about the home buying or selling process? Is it right for you? Is it financially viable? Contact us now for a free, no obligation session with a Premier agent. 516 795 1000

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