The average age of UK first-time buyers is 30 years old, and nowadays many people aren’t settling down until later on in life. Stepping on to the property can be difficult for anyone, even couples with a joint income and deposit. So, you may be thinking you won’t be able to purchase a property on your own, it can be daunting and expensive, but it can be done!
What can you afford?
A mortgage lender will assess any financial commitments you have before applying for any type of mortgage. They take into consideration your in-comings and out-goings. Such as wages, credit agreements and direct debits that could impact your eligibility to pay back the loan. Of course, a good annual wage is going to help but it might be worthwhile speaking to a mortgage adviser to get a better idea of what you can afford. A mortgage adviser will also be able to search the whole of the market to find a lender that can suit your financial and personal needs, and will have knowledge of products suitable for a single mortgage application. You can speak to an adviser here.
Check your credit score
You don’t have anyone else to rely on, so you’ll need to make sure that you can prove to a lender that you’re an exceptional borrower. If you have a less than perfect credit score this could have an impact on your eligibility for a loan. Checking your credit score is fairly simple – and in many cases completely free – so make sure you take this step before applying for any mortgage.
The bigger the better with a single mortgage
Whether it’s a single mortgage application or joint, the larger the deposit the better. The more you can put in the better the mortgage deal will be. You can still get a mortgage with a 5-10% deposit, however, better mortgage rates will be open to you if you can save more. On a single income this may seem difficult, especially if you are paying out for rent. By budgeting yourself strictly, reducing unnecessary spending and clearing off any unused direct debits you can save a lot more than you think! Also, you can invest in government schemes like the Help to Buy ISA which may make saving a bit easier.
Disadvantages of a joint mortgage
The main downside to a joint mortgage would have to be that a change in circumstances is more likely, in the case of a separation, or a falling out, it can be tricky to get out of because any changes to the mortgage must be authorised by both of you.
Bearing in mind lenders assess your income, credit record, and what you spend each month on bills and expenses, if your partner is a risk in any of these aspects it could affect your application. Should one of you be unable to make their share of the monthly repayment and you miss a payment this will affect the credit rating of everyone on the mortgage.
Protect your income
Without a partners income, should you be unable to work or fall ill, paying back single mortgage is still entirely your commitment. Failure to meet repayments can have serious consequences, like your home being repossessed. It’s important to have something in place to ensure your financial commitments are paid. An insurance like Income Protection can help with this and might be a sensible option for a single buyer.
The above post is intended to be informative but does not constitute advice – financial, legal or otherwise. Any opinions given are the author’s own and do not necessarily reflect the views of SO Media.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.