How to get a mortgage on one single income, what lenders accept this and how to get approved really quickly online today
It can be more difficult to get a mortgage on one income than two. This is because for couples, mortgage lenders take both incomes into account when assessing mortgage affordability.
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How can I get a single income mortgage?
A single income mortgage is based only on one person’s earnings. As well as solo buyers, some couples might only have one earner.
This is the case for many homeowners in the UK therefore there are lenders that can help for sole income mortgages as long as you pass mortgage affordability for your chosen loan amount.
Is a single income mortgage better than a joint income mortgage?
Couples with two incomes will be able to borrow more than one person on one income.
However, both people will jointly own the property. This could become complicated if the couple later split up – so think carefully before taking out a mortgage with your partner.
Is it harder to be approved for a mortgage if you have only one income?
Single mortgage applicants will need to pass the lender’s affordability assessment.
Getting a mortgage alone can be more challenging as you will also have sole responsibility for the household bills.
However, if the mortgage is affordable, getting a single income mortgage is no more difficult than getting a joint mortgage.
Sometimes it can be easier as the mortgage lender will only need to assess one person. Getting a joint mortgage with someone with a bad credit history will make it more difficult to get a mortgage.
Our advisors will be able to look at the entire market and consider lenders with a positive track record in single-salary mortgage applications.
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How much mortgage can you get on one income?
Most lenders will lend up to 4 or 4.5 times your annual income.
So if you are a solo buyer earning £25,000, you can normally borrow up to £137,500.
However, lenders will also look at your outgoings such as debts and dependent children, when assessing affordability.
What is the Mortgage Market Review?
In 2014, the Mortgage Market Review (MMR), made significant changes to how lenders looked at what mortgage someone could afford. Providers now take a more responsible approach to determining what borrowers can borrow.
A mortgage affordability calculator gives prospective borrowers a better opportunity to see how much they can borrow based on their future and current outgoings before you submit your application.
Salary multiples still play a significant role in determining how much a borrower can borrow.
Most lenders will lend a multiplier of 4 to 5 times the applicant’s salary for single-income mortgages and some will go as high as x5, while others will go as high as x6.
For more information on these, see below:
- 3x income mortgages
- 4x income mortgages
- 5x income mortgages
- 5 and half times income
- 6x income mortgages
- 7x income mortgages
What is stress testing?
A lender must stress test your finances to ensure you can afford your mortgage in the future.
Lenders will need to know if you can meet your mortgage obligations if interest rates rise, so will assess your affordability at a higher interest rate than payable on the mortgage.
Is it possible for couples to apply for a mortgage if they have only one income?
Yes, many households rely on one income. Many couples, married or not, will require one spouse to stay at home to care for their children or to take care of them if they cannot work.
A lender may be considering future earnings or expenditure changes. It is possible that a spouse who isn’t working plans to find work opportunities later (for example, when the children get to a certain age).
This would likely add credibility to an application rather than hinder it.
Are your parents able to act as guarantors for a mortgage with a single income?
Yes, some lenders offer guarantor mortgages.
Guarantors are responsible for paying the mortgage if the main borrower fails to do so.
The guarantor is usually required to put their own property up as security against the mortgage. This decision shouldn’t be taken lightly as the guarantor could lose their home if the other mortgage isn’t paid.
Guarantors are usually released from responsibility after a specified period of time or until the mortgage is paid in full. There are different types of guarantor mortgage lenders that we work with on a daily basis.
Read more: Who can be a guarantor for a mortgage
What is a joint mortgage sole proprietor?
In this type of agreement, the joint mortgage sole proprietor is taken out in joint names (E.g. mother and son), but only one person (e.g. son) is named on the property deeds and lives in the property.
You should take legal advice before entering this type of agreement.
How much deposit is required for a mortgage with a single income?
The bigger the deposit you can save, the better. You’ll have access to more mortgage deals at better rates if you have a larger deposit.
You’ll need at least a 5% deposit to get a mortgage as this is usually the minimum amount required by the majority of lenders.
Talk to Loan Corp to get approved on a single-income mortgage.
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