A single person's guide to buying a home

Buying a home can be laborious, stressful and confusing. This is never truer than when you have to do it alone, without the extra emotional and financial support provided by a partner.

Then again, there are also great benefits to owning a home alone – it's yours and yours alone, you can make independent decisions on whether to make extra repayments depending on changes to your income, you can decorate it exactly as you like and you don't have to share the capital gains with anyone.

But first you have to buy it. The first hurdle is saving a deposit – this needs to be at least 10 percent of the purchase price, and you'll have to save the entire sum yourself. On one income, it may take twice as long.

Next, the amount you are able to borrow depends on your income. The higher your income, the more money you will be able to borrow – and your repayments will therefore be higher. In determining your borrowing limit, lenders use a debt-service ratio – the ratio of loan repayments to your gross income. For a single person on one income, this ratio should not exceed 35 percent. For double-income earners, the ratio is usually around 40 percent.

Your borrowing capacity will also depend on the interest rate. When rates are higher, your borrowing capacity is lower. Right now, interest rates are relatively low so you will be able to borrow more.

While interest rates are on a downward course at the moment, you must be prepared for their eventual increase. Will you be able to afford your repayments at a higher interest rate?

Whether you are buying alone or in partnership with someone, lenders will be interested in your job stability and financial situation. Are you employed full-time and how long have you been with your employer?

Once your home loan application is approved and you find a home you love within your borrowing limit, there are other considerations for which you must plan. Homes, whether apartments or free-standing houses, require ongoing maintenance.

Leaky roofs, cracks in the wall, a collapsed fence – such expenses can often be unexpected, but you should ensure you are able to cover them should they occur. Building maintenance for apartments and townhouses is covered by strata levies, and you should factor in these quarterly repayments in your budget.

If you can afford it, now is a good time to buy.

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