Getting a Mortgage as a Single Person

single woman holding sold sign for house

If you are not in a relationship, you might be frustrated at the lack of options available when it comes to buying a house. Obtaining a mortgage as a single person can be extremely difficult, especially if you have limited financial means.

The great news is there are probably more options available to you as a single person than you realise, and this article tackles those alongside providing some helpful information. With mortgage lenders keen to offer mortgages currently, now could be the opportune time to get a mortgage as a single person.

Let’s explore getting a mortgage as a single person.

Can I Get a Mortgage on My Own?

Yes, mortgages are available to single people and lenders process single-person mortgage applications on a regular basis.

However, it can be more difficult to get a single person mortgage, mainly due to affordability. There are also other issues that single people face with mortgages such as not having a suitable deposit.

Is it Harder to Get a Mortgage on Your Own?

Yes, applying for a mortgage on your own will be a little more difficult because of the financial demands.

For example, if you are buying a property on a joint basis, you will typically have two income streams contributing to the affordability calculation.

The amount of deposit you can put down could be crucial when applying for a single person mortgage, especially if your affordability calculation is tight. Once again, single people often have lower deposit amounts because they have had to save the money on their own.

With that said, most single people look for more affordable housing options, and property values on single person mortgages are typically much lower compared to joint mortgage applications.

Speak To A Mortgage Adviser

Free phone and video consultations are provided in the U.K.

Get Started

Mortgage Options with Single Income

The most common single person mortgage option is a traditional residential mortgage product. Most people will simply save a deposit, typically 5-10% of the purchase price and then use a mortgage to purchase the remaining percentage.

However, there are various ways to make homeownership for single people a little easier, depending on your circumstances and financial situation.

See What Our Clients Have To Say

Shared Ownership

Shared ownership allows you to purchase a percentage of a property. For example, you might be able to buy between 50% and 75% of the property.

Shared ownership schemes vary depending on the companies operating them.

The common factor is you will still have additional monthly expenditure to your mortgage because you will pay rent to the Housing Association based on the percentage of the property you do not own.

For example, you may have a mortgage on the 50% you own for £900 per month, and then have a rental payment on the remaining 50% for £700 per month.

When considering a shared ownership scheme, you should look at:

  • Overall monthly cost. Sometimes it can be cheaper to get a mortgage for the whole amount if you can pass the affordability calculation.
  • Many shared ownership properties are new builds which have inflated prices compared to existing properties. You may find the price has been inflated by the company by up to 20% and your 50% purchase could be 30% in real terms.
  • Service charges. Most shared ownership schemes have other fees including service charges.

Use a Guarantor

Guarantor mortgages can be useful if you have a bad credit score, or you need to reassure a lender that you can afford the monthly payments.

Your guarantor will need to guarantee they pay the mortgage on your behalf if you miss payments. It is a significant financial commitment and anyone acting as a guarantor should consider the agreement carefully.

First Homes Scheme

The First Homes Scheme is a government schemeoperated by local authorities. The scheme has very specific requirements and may be suitable for you if you:

  • Are a first-time buyer
  • Have a maximum annual income of £80,000
  • Meet your local council’s eligibility criteria

Each council has different rules around how they evaluate your eligibility for the First Homes Scheme. Most councils will stipulate you need to be a resident of the local area for a period before applying.

If you do meet the requirements, the First Home Scheme allows you to purchase a new build property at a discounted price. This discount is generous, normally 30% off the total value and more than offsets the inflated new build pricing (mentioned in the shared ownership section).

The downside is you will not realise the discount in monetary terms as you must sell the property on at the discounted value. The First Home Scheme is therefore ideal for those looking to buy a cheaper ‘forever home.’

How Much Can I Borrow with a Mortgage on My Own?

The affordability criteria for a mortgage are the same for single people as it is for joint applicants. You will need to demonstrate your income is sufficient to afford the mortgage.

A rough way to do this is to multiply your annual income by 4.5. For example, if you earn £35,000 a year, you can borrow roughly £157,000.

This is not an exact approach as some lenders allow you to borrow up to 5 times your annual salary and your monthly expenditure, commitments and loan term will also be factored into the equation. Once expenses are considered, most people find the amount they can borrow is significantly different to the values on a generic online mortgage calculator. Use our mortgage calculator for a rough assessment of your mortgage affordability.

What if I Have Bad Credit?

Having bad credit can exacerbate your mortgage application, and it will limit the number of lenders available to you. Most high-street lenders will refuse to offer a mortgage to anyone with a bad credit score.

There are specialist mortgage lenders who provide bad credit mortgages. The interest rates on these loans are normally much higher to reflect the risk that the lender has.

With that said, unless your credit score is completely decimated, having a bad credit score should not prevent you from finding some form of mortgage.

Speak to a Mortgage Expert

Finding an affordable mortgage product as a single person can be difficult. It can be much worse if you have a low deposit amount, or you want to borrow close to the top of your financial means.

Boon Brokers is a Whole of Market Mortgage, Insurance and Equity Release Brokerage. Boon Brokers provides fee-free mortgage advice.

Contact Boon Brokers to discuss your single person mortgage today.

Gerard BoonB.A. (Hons), CeMAP, CeRER

Gerard is a co-founder and partner of Boon Brokers. Having studied many areas of financial services at the University of Leeds, and following completion of his CeMAP and CeRER qualifications, Gerard has acquired a vast knowledge of the mortgage, insurance and equity release industry.