Mortgages and the Single Borrower

Where applications from single borrowers used to be a rarity, these homebuyers now account for 24 percent of home purchasers. It's a trend that's expected to lead to more than 41 million single-person homeowners by 2030.

The decision to own alone crosses all age groups from young, first-timers to a growing number from the 55-and-over category. The choice is being fueled by rising rents, divorce, and the growing number of surviving spouses in older age groups, as well as by the sense of empowerment a home represents to many younger prospective clients. For Loan Officers, it can represent an opportunity for new clients that are not yet being well-served.

Though borrowing while single doesn't change underwriting standards, understanding some of the shared needs of this diverse group of individuals may be helpful. Here are a few things to keep in mind as you work with more of these clients.

Working with Single Borrowers

  • Know their goals. Single clients tend to be looking for greater life efficiencies. They seem to prefer to be near the things they spend their time on: work, friends, entertainment, and healthcare. The need for improved financial efficiency may also be at play. That leads to a deeper discussion regarding how different mortgage products would suit their current financial situation and their long-term housing goals.

  • Have an affordability discussion. Maintaining a property is always a challenge. When the full responsibility falls on one person-often a working or retired person-they may find it difficult and expensive to keep up with what needs to be done. Plus, using outside experts can be time consuming to coordinate. When determining how much of a mortgage they want to prequalify for, clients may need a reminder to anticipate the nature of those expenses. They also may need help understanding how homeowner and condo association fees may alleviate-or increase-their home-owning expenses.

  • Promote the inspection as a good learning opportunity. Encourage your clients to make the most of the inspection. This is especially useful if they have not owned before or previously depended on someone else to keep their home running. The time spent shadowing the inspector enables them to become familiar with the home. More than helping them fine-tune the sales contract and ask for concessions, the inspection can help your client pull together a to-do list and begin budgeting for it before moving in.

  • Express patience. Many single clients, especially the first-timers or those who only recently returned to a single status, may require a bit more hand-holding. They mainly need someone who understands that what they are experiencing often includes more than just the discomfort over the unfamiliarity of a real estate transaction.

Being able to cultivate a reputation for helping single clients make sound housing arrangements, while fueling a sense of empowerment, can provide a steady flow of new prospects looking for similar financing know-how.