Many single women like Lorenzo are buying their own homes. In fact, it is much more common for single women than single men to purchase a home. Here are three financial tips for prospective home buyers.
1. Know what you can afford
Affordability is a huge issue. That means not only affording the mortgage but also the taxes, the maintenance, the insurance and having money set aside for emergencies.
The conventional wisdom for a down payment has not changed. Expect to put down 20 per cent for the mortgage. At the same time, have an emergency fund to cover at least six months of expenses, experts say.
Even if you are purchasing a new property, you will need a reserve to cover repairs. Remember that you have to pay property taxes, too. A good way to make sure that you can is to divide the tax bill by 12 and set the money aside each month.
A spreadsheet can help you figure out all the costs of owning the property. Use an online housing calculator to figure out what you can afford.
2. Protect your assets
When you are buying a property alone it becomes even more important that you have adequate insurance coverage. That includes life, disability as well as healthcare insurance.
You might also want to look into setting up a trust so that the proceeds from your insurance policies go to your independent beneficiary if something happens to you.
If you get married or live common-law, you can also look into shielding your home in the event of a divorce with a prenuptial agreement or a co-habitation agreement.
3. Consult experts and take your time
Since buying a home is one of the biggest financial decisions most people make, it is a good idea to work with a real estate agent and consult with a financial adviser. Do your research and take your time.