Buying a home on your own can be a difficult process. From saving a deposit to paying for all the fees and charges associated with homeownership, there are several factors that can make it difficult for single people to get on the property ladder. One of the biggest obstacles that needs to be overcome involves securing a mortgage. Thankfully, although it’s often more difficult to get a mortgage on one income rather than two, it’s certainly not impossible.
Your lender will take your income into account
When deciding whether to approve a mortgage or not, lenders will take the potential borrower’s income into account. If you’re in full time employment, they’ll look at your salary. If you work part time, they’ll look at your hourly wage and average hours. If you’re self employed, they’re likely to look at your average income from the last two years.
The bigger your deposit the more attractive you’ll be to lenders
Saving a deposit can of course be a challenge and it’s even harder if you’re doing it alone. So it can be frustrating for single first time buyers to find out that the more money they save the more likely their application is to be approved.
Traditionally, a deposit of at least 10% of the property’s value is required in order to obtain a mortgage.
In some circumstances, it’s possible to borrow up to 95% of the property’s value through the Help to Buy scheme.
But to access the best interest rates and keep your mortgage repayments as low as possible, it’s worth saving a deposit of 20% or more. Not only can a larger deposit give you a wider choice of deals, it can also increase your chances of having your application approved in the first place.
Your borrowing potential could restrict your choice of homes
Although the amount you can borrow will depend on a multitude of factors from the size of your deposit to the level of debt you have, lenders are unlikely to lend you more than four to five times your income. For example, if you earn £25,000, this means you’re unlikely to obtain a mortgage of more than £100,000 - £125,000.
When looking for a place to buy, you’ll need to take your borrowing potential into account. Looking at homes worth £250,000 is likely to lead to disappointment if you’re buying alone, earn £30,000 a year and have a deposit of just £35,000 saved.
A mortgage broker can really help you increase your chances of getting a mortgage and buying your own home. They’ll take a close look at your finances before pointing you in the direction of the lenders most likely to approve your application. They’ll help you every step of the way, guiding you through the whole process while saving you time and money. To find out how TaylorMade can help you buy a home, please get in touch with our team.
