Mortgage For Single Parents
Book A Free Consultation
- 1 Mortgage For Single Parents
- 1.1 Mortgage for Single Parents
- 1.2 Owing to a House Cons
- 1.3 Debt Settlement Resources & Articles
- 1.4 What Is The Canadian Emergency Wage Subsidy CEWS
- 1.5 Will I Lose My Home or Car if I File for Bankruptcy?
- 1.6 Can Bankruptcy or Consumer Proposal Eliminate Tax Debt?
Mortgage for Single Parents
Being a single parent has a lot of responsibilities. These include food, transportation, healthcare, insurance payments, and mortgage payments.
The government-mandated child-support payments take care of most of these, but single parents still have to make the monthly necessary payments to pay these items. These payments usually range from $4000 – 6000 per year.
From combined incomes, the single parent needs to support the family through her income. This is exacerbated when the partner does not contribute to the expenses. One needs to take on additional jobs to be able to address the growing expenses of the family.
This leads to feelings of not having control over one’s life and a feeling of helplessness. Being financially independent is the biggest challenge of single parents to date. Being debt-free is a big factor in happiness among single parents. One of the most popular debts of single parents is the mortgage.
The mortgage of single parents has significantly increased over the past twenty years. A recent study conducted in Britain stated the debt difference between home-owning single parents and single parents who rented apartments.
What Are The Advantages Of Owning A Home?
A good long-term investment: The Federal Reserve Bank of St. Louis reports that the average price of homes sold in the United States rose 28% in 10 years starting in 2009 and 10% from 2014 to 2019. Even if the value of the structure itself depreciates, the land on which it sits can become more valuable.
You are investing in an asset for yourself rather than a property management company.
Building equity: Your equity is the difference between what you can sell it for and what you owe. Your equity grows as you pay down your mortgage. Over time, more of what you pay each month goes to the balance on loan rather than the interest, building more equity.
Federal tax benefits: Mortgage interest is deductible, as is interest on home equity loans, property taxes and some closing costs when buying the home. However, Figgatt notes, tax law changes raising the standard deduction and capping deductions that can be taken on state and local taxes, make it less likely for younger people and those buying starter homes to enjoy those breaks.
Greater privacy: Also, since you own the property, you can renovate it to your liking, a benefit of homeownership that renters don’t enjoy.
Findings showed that single-parent homeowners’ debt is at 13% while single parents who rented apartments was at 25%. Either way, the study shows that single parents are struggling with mortgage payments. Several alternatives, such as moving to a complex to lower payments or living with other single parents have been done, however, does minimal, or no help in the mortgage payments.
One way of securing financial independence has a strong income power in terms of mortgage payments for single parents. The single parent needs to analyze his finances to figure out what works in terms of mortgage payments. Sometimes, the single parent realizes that he/she needs to take on additional jobs to support the mortgage payments.
In choosing the right mortgage for single parents, one needs to think about the following, current financial standing, dynamics of changing finances, how long one intends to keep the house, and the change of mortgage payments.
One needs to consider the fixed mortgage rather than the yearly mortgage and refinancing, for example. The bank also reviews one’s credit limit, when the single parent applies for this.
For easier Loan approvals, our real estate specialists recommend to follow the following:
-W2 forms for the last two years
– most recent pay stubs covering a 30 day period
– Federal tax returns (the 1040s) for the last two years, if:
-You are self-employed
– earn a regular income from capital gains
– earn sizable interest income, etc.
-earn more than 25% of your income from commissions or bonuses
-own rental property
-you are in a career where you are unlikely to take non-reimbursed business expenses
-Year to date Profit and Loss Statement (for self-employed)
-Corporate or Partnership tax returns (if you own more than 25% of the business)
– Pension Award letter (for retired individuals)
-Social Security Award (for those on Social Security)
-Bank statements for the previous two months on all accounts
-Statements for two months on all stocks, mutual funds, bonds, etc.
-Copy of latest 401K statement
– Explanations for any large deposits and source of those funds
-Copy of HUD2 Settlement Statement on recent sales of homes
– Copy of Estimated HUD1 Settlement Statement if a previous home is for sale, but not yet closed
– Gift letter (if some of the funds came as a gift from a family member
-Landlord’s name, address, and phone number
-Explanations for any of the following items which may appear on your credit report:
-credit inquiries in the last 90 days
-copy of bankruptcy papers
-Copy of purchase agreement
-Documented receipts of child support
-Copy of Social Security Card
-Copy of Driver’s License
-Copy of DD214
-Copy of most recent monthly mortgage bill
Owing to a House Cons
Homeownership has some drawbacks, too. A homeowner is completely responsible for all maintenance inside and outside the property, including care and the yard and trees’ upkeep. You must also consider buying extra equipment and tools for maintenance when you purchase a house. Although any improvements you make will likely increase the home’s resale value, they require an investment of time and money. Another con is that utility bills are generally higher because houses have more space than condos.
USE AS AN INVESTMENT TO SUPPORT RETIREMENT
Business owners often have their eventual exit plan and retirement in mind when deciding to buy a building.
The idea of selling the company but keeping the real estate appeals to many business owners, noted Craig Caliger, manager of commercial banking at City National Bank. For many, he said, “that seems to be the big driver.”
This strategy may not work well for those planning to sell their companies in a few years. Still, entrepreneurs with longer time frames are more likely to pay off their commercial mortgages, keep the property and collect substantial income from future tenants in retirement. Meanwhile, long-term real estate trends should work in their favour.
A big advantage of buying a house is that you have total control over the property to remodel or make changes without others’ consent. Another house advantage is that it allows for extra indoor and outdoor space, which is more conducive to accommodating families, children and pets. Houses also feature more storage space in closets, attics or basements. Houses offer more privacy because neighbours don’t live as close by as they do in condo buildings.
The target markets for HOME are:
Aspiring First Time Buyers who want to step onto the housing ladder but struggle to qualify for a commercial mortgage for a variety of reasons, including difficulties saving for a deposit
Older Owner Occupiers would like to move to a house that is right for their changing needs but who don’t have enough equity to secure that home on the open market and can’t or don’t want to become social rent tenants.
Freedom & Stability
If you have children, there’s nothing better than sending them to your backyard to play, instead of taking them to the park. Many people enjoy knowing that their children will grow up in the same neighbourhood, with the same friends and schoolmates for many years.
Senior citizens and single people appreciate the freedom of homeownership. They can paint the walls any colour they like, put up a satellite dish for their TV and build customized shelves without worrying about what the landlord will think. Owning your home also eases those nagging fears about rent inflation. When you own your home, you’re truly in charge.
Debt Settlement Resources & Articles
What is CEWS in Canada? Retailers in Canada who have seen a drop in revenue due to the pandemic may be eligible for a subsidy to cover part of their loss. See how you can apply
Will I Lose My Home or Car if I File for Bankruptcy?The goal of the bankruptcy process is to provide people who are struggling with debt with an option to eliminate those debts and start fresh. What Occurs to your Home or Car if you Declare...
Two processes that could be eliminate your tax debt are consumer proposal and bankruptcy. Learn about these two debt management options and let LIT select which is the best for you.
Request a FREE personal and no obligation confidential appointment