I'm currently working with a number of clients who are single first time buyers or home movers following a change in personal circumstances.
Getting a mortgage on one income is not easy, to say the least!
Getting a mortgage on one income is not easy, to say the least!
What Is Affordability and Why Does It Matter?
Affordability is how much a lender is willing to let you borrow based on your income, outgoings, credit profile, and deposit.
Things that will help your affordability:
- Save as much deposit as possible.
- Pay off any existing debt before you apply for a mortgage. (This includes avoiding Buy Now Pay Later agreements and Klarna / Clearpay purchases)
- Use government schemes and support, such as Lifetime ISA, which allows you to save up to £4,000 per annum with a 25% bonus from the government, which you can use towards a house deposit.
- Some lenders allow to use certain government benefits to be used towards affordability. They include Universal Credit, PIP and child benefit.
- Most lenders allow maintenance payments to be used towards affordability.
- Look for lenders who offer increased affordability (not only for first time buyers). Some offer this for people:
- earning a salary of 30k plus, such as Nationwide’s Helping Hand. Other lenders offering similar options are Halifax, Barclays, HSBC and Santander.
- newly qualified in certain professions, like doctors, dentists, vets, accountants, solicitors, surveyors, architects, etc. (Cooperative Bank, Principality Building Society)
- Consider a freehold property to avoid the committed expenditure of service charges and ground rent that come with a leasehold. They will affect your affordability.
- Choose a longer term, which will lower your monthly payments. You can change the term at each re-mortgage to make sure it’s right for you at each stage and the mortgage remains affordable. Choosing longer term will mean it will take longer to repay your mortgage, and you will pay more interest on the overall. However, it can make the difference of being able to afford the mortgage or not. As you are able to change and shorten it at each re-mortgage, it gives you the flexibility of reducing it when the time is right.
- Even with complex income or impaired credit history, there may be solutions available from more specialist lenders.
You may be able to afford more than you think.
Get in touch with me for an affordability calculation and a chat about options.
"Your home may be repossessed if you do not keep up repayments on your mortgage."
Iwona - Senior Mortgage and Protection Adviser
