What Single People Need to Know Before Buying A Home

In this episode, Jennifer talks about what single homebuyers need to know about the homebuying process. She debunks common myths, like the idea that lenders discriminate or that a single income is a penalty. Drawing on her two decades as a mortgage lender, Jennifer explains how focusing on the math, not marital status, is key. She shares why buying a home as a single person offers unique benefits, like financial control and building equity, and encourages listeners not to wait for a partner to achieve homeownership.

Transcript

SPEAKER_00 0:00

What do single home buyers need to know about the home buying process? I wanted to do this video for a couple reasons. Number one, you guys asked for it. Number two, there's a lot of myths and misconceptions. And number three, I think for single home buyers to be successful, if you're on the edge, you need to change your mindset. So we're gonna be talking about all of that in this video. If you're new to the channel, I've been a mortgage lender for 19 years. That's right, guys. That is close to two decades talking to people every single day about money, looking at their credit reports, looking at spending habits. And that's why when you talk about who knows this topic, right? It's me. I've seen it every single day. Okay, if you guys want to help with a mortgage, call my team and I. Yes, we can help you across America. Number one, people are concerned that a lender is gonna discriminate against them because they're single. It's important that you recognize that is illegal. That's right, that is illegal. It is against eCOA for us to discriminate against single people. And you're like, well, where did this even come from? Oh, dark part of American history. Did you know that women couldn't buy a house without a male cosigner with a loan until 1974? No joke. The woman could be a millionaire buying a hundred thousand dollar house with no debt and she would need her son to co-sign. Ridiculous. But those old-timey negativities hang on now. I've had clients where they've talked to their mom or their grandmother and they're like, are you sure you can do that without a man? It's not because you need a man, it's because in the past you needed a man. Okay? Same thing for men versus women. I want to be very clear. We actually have more single women buying houses than men right now at a pretty good percentage. So it's important to recognize that no lenders cannot discriminate against you because you're single. So I asked Gemini, why are people worried about this? Because I get questions from reporters all the time where they're like, Well, what's wrong with being single and buying? And I'm like, being single and buying is awesome. There's nothing wrong with it. So, what are you guys being fed? So I asked Gemini. Gemini is my favorite, and I said, What are the disadvantages of buying single? Number one, the single income penalty. I think this is nonsense, and I'm gonna tell you why. Income is income. You could be single and make more than a married couple. The assumption that two incomes is more than one income is totally flawed. Totally flawed. I cannot tell you that enough. You know, I don't know why people assume that married people are making so much more. Look, if you make $100,000 and you're single, you're still in a better financial position than the married couple with two incomes if they both make $40,000. That leads to the next question, which is well, Jen, if I lose my job, like that's a bigger risk. Let me circle back, guys. If I'm qualifying you at $100,000 and you lose your job, yeah, you're likely not gonna be able to pay your mortgage unless you have savings. If I qualify this couple, right, they're each making $40,000. If I qualify them off of $80,000 of income and one of them loses their job, guess what? They can't afford it either unless they have a bunch of savings, okay? It's just math. It's that simple. Whenever you start to get in the, well, if I, should I, could I, would I, mmm, it's math, okay? And I've heard it before where it's like, well, what if I get married and they don't like the house? Turn the house into an investment property. Hopefully, you've built some equity. And if they really don't like it, and if you don't want it to be a rental property, sell it and use some of the proceeds to buy your next house. Personally, what I wish I had done, I know I sound like kind of mad. I'm not mad. What I wish I had done if I had known all of this when I was younger is buy a house when I was single. Oh my gosh, premarital property people. Yes, that would have been great. Turn it into a rental, then buy a house together with my husband. Fantastic. And what's great is we are seeing a lot of women doing this right now because they want to start nesting, they want to start making that beautiful home, they want that security, they want to build equity. Like we're seeing a lot of that right now, which is a good vibe. Let's talk about um what else you know AI was saying is a potential problem. And I wanted to address it from AI because I know that everyone's going there and asking the question. Um, the next one was the safety net factor, which I think I covered by saying, look, when we're qualifying a couple, nine out of 10 times, we're using both incomes to qualify. So if one of them loses their job, there is no safety net. The only way there's a safety net is if number one, you have savings. Having savings is a safety net. Number two, if you're a married couple and you only qualify off of one income, okay, and you both have equal income, then in theory, you have a safety net, right? But if you're both like you're married, one makes 80, one makes 40, and you qualify off the 80 and they lose their job, you still don't have that safety net. So let's kill that one. Um, this one was interesting. Algorithmic bias. Modern underwriting relies heavily on automated scoring systems. If an automated system flags certain single implic applicant profiles differently, it can sometimes result in disparate impact. I have not seen that, okay? Um, with the uh like the we use Fannie, Freddie, DU, LP underwriting. I haven't seen single people targeted. You know, when I see something denied through um automated underwriting, it's generally gonna be debt to income or credit history, sometimes job, but those are generally the factors. I have never seen something denied because someone was single, okay? Have not seen it. Um do I think that could happen? Maybe, but like if it did happen, it's a lawsuit. It's totally a lawsuit. Like if suddenly a lender had some sort of AI program that was underwriting people and it was discriminating, which is what that would be, yeah, that's a lawsuit. So have I seen algorithmic bias? No. I mean, trust guys, if I had, I would be the first one raising my hand saying this isn't right. Because I do think home ownership and getting in when you're single, I think it's so magical. I mean, I tell my son all the time, you know, he just got out of college and he's he's not buying a house yet because he's in New York, and I'm like, oh baby, let's get you in a house quick. Let's do this. Okay, so let's talk about the mindset. I want you to focus on the math, okay? I want you to always focus on the math. And if you're ever like, well, I would feel more comfortable if someone else was on the mortgage with me, hmm, not really, guys. Maybe, like maybe if they were perfect, but over my two decades in the industry, I've seen people lose their homes because one spouse gets a gambling addiction. I've been on the phone when one spouse realizes that they have a car payment on their credit because the other spouse bought a car for their girlfriend. I have seen, you know, I've had the calls where they say to me, Hey Jen, can you not tell my husband? Can you not tell my wife about these five credit cards? They think I paid them off.

unknown 8:03

Woo!

SPEAKER_00 8:03

I have seen it all. Just because you're married doesn't mean you're safer. I've also seen it where people are married, let's say one makes $100, the other one makes $200. They're going, oh my gosh, we have $300,000 in income. But the $200,000, you know, maybe they're a doctor and they have $10,000 a month in student loan debt. It eats away their ability to qualify. Married isn't magic. Now look, if you want to get married, get married. I'm not saying don't get married. I'm just saying, yes, you can buy your house when you're single. When you start getting in the mindset that another person can make this safer, I want you to think of some of the horror stories I just told you, okay? Because in these marriages that I'm referencing, the other spouse didn't have a clue. No, they didn't have a clue. They thought they were safe. But here's the beauty about doing it yourself. You control the world around you. You control your spending. If you look at your budget and you say to afford this house, I can't do DoorDash, you're not doing DoorDash, right? If you're married, you gotta negotiate. What if they like DoorDash? Okay, you control your job. That's the thing. There's this weird feeling with someone else where if it's someone else's job, you're like, oh, they won't lose it, but with your own, you're like, I could lose it, I don't know. Even the most confident, right? Like I go through that, which is so crazy, where I'm like, oh, I don't know, maybe that video was too controversial. Not this one, but there's been a few. Look, it's natural to have some doubt, but I'm telling you right now, you can do this on your own. It will be fantastic. Someone else, if that person comes along down the line, fantastic. But don't count your future on it, okay? So I hope this video has been helpful. Questions, comments, as always, reach out. We are here for you 786 933 2077. And if a lender discriminates against you because you're single, report them. That's right. Thanks for watching, guys.