Single person mortgages – Which lenders to use and what rates to expect.
Single and considering obtaining a mortgage?
Single-person mortgages can seem daunting. Many first-time homebuyers take their first steps on the housing ladder while they are still single.
There are many opportunities to find great deals for people who have been separated or divorced; here at Loan Corp, we’re experts in mortgages.
We offer free mortgage advice and introduce you to a lender who deals with single-person mortgages daily.
We aim to ensure you receive the best mortgage deals and approval on the market, start your mortgage journey with us below:
Can you get a mortgage on your own?
Yes. A single person mortgages are available. These mortgage deals are much more common than you might imagine.
Many first-time property buyers choose to buy their first property on their own. This could mean they must wait longer or pay a lower deposit than someone with joint incomes.
First, you should know that if a lender rejects your mortgage application, it does not necessarily mean another lender will.
Other lenders declined over 50% of our customers we had helped on the mortgage market before they received a mortgage through one or more of the brokers we work with.
How to buy a house with one person
To understand what deals might be available to you if you are applying for a mortgage alone, you can look at our mortgage affordability or how income is calculated.
A mortgage broker that specialises in solo applicants is a good choice. This will help you to find the best deal for you and your circumstances.
We can help you find the right mortgage broker. Our broker-matching service is free and will consider your history and mortgage needs.
We’ll match you with an expert who has helped people like you daily.
This is a fully-vetted mortgage advisor who specialises in arranging mortgages for single applicants.
Expert mortgage advice is worth it if you do it all by yourself. We will explain the monthly mortgage payments and any other costs you may have.
Single-person mortgage sizes
Your income will determine the maximum amount you are allowed to borrow.
The provider will limit the amount you can borrow. Some will restrict your loan to you at 4.5 times your income. Others will allow you to borrow up to x5 or x6, depending on the circumstances.
Lenders may be less likely to lend if you have a higher income multiplier. For example, if you have significant outgoings, the lender might not approve a mortgage for a certain amount.
Most lenders will deny self-employed borrowers if they don’t have evidence of their earnings. However, some specialists may be able to lend you a mortgage based on your most recent trading year. This can be helpful if you’ve had an intense 12 months.
Right to buy in the sole name.
If you are eligible for the Right to Buy program and wish to buy your council house through it, then the mortgage and ownership will need to be in the names and addresses of the Right to Buy applicants.
Most lenders will require you to apply for the Right to Buy Mortgage alone if you are the only one who qualifies. A mortgage lender will evaluate your income and credit history individually.
How to get a joint right to buy a mortgage
Sometimes, a single person may be named on the Right to Buy paperwork. However, they cannot get a mortgage on their behalf and would like to add another person to the mortgage to fund their Right to Buy purchase.
These cases are similar to joint mortgage sole proprietor setups, and few lenders will be happy to help.
Consider a joint mortgage only in your exclusive name
A common situation is when a family member helps another family member with their mortgage payments. They have formally agreed to contribute. This is called a sole proprietor, joint borrower (JBSP) agreement.
A JBSP mortgage lets a second party. Usually, a parent helps their child purchase a home. They can join their mortgage without appearing on the title deeds.
This type of mortgage is excellent for first-time buyers. However, it may also offer tax benefits that can be used to protect assets and provide tax savings.
Bad credit
Another situation is when one applicant has poor credit, and you want this to be avoided on your mortgage application.
To avoid having bad credit on your application, you can apply for a single mortgage to finance a property. Some lenders will accept even severe cases of bad credit.
Our specialist brokers are familiar with the lenders who will offer mortgages to those with bad credit histories. They can help with everything from late payments to debt management to bankruptcy.
Although many believe that a 50% deposit is required before a lender considers your mortgage application, this is not always true. You can buy with as little as a 5% deposit in certain situations, at favourable rates, too.
Can I ring-fence the deposit contribution to a joint mortgage?
It is common for one person to contribute more money to a joint mortgage when they purchase the property.
If you are concerned about losing your share if the property is sold due to a divorce or other dispute, you can apply for a joint mortgage with tenants in common.
If you are buying solely, however, you can create a contract with a solicitor and agree on terms apart from the mortgage.
This is a legal agreement that your mortgage lender will not recognise and should be made separately from the mortgage.
Remortgage to one name (take someone out of a mortgage).
The process of remortgaging a joint mortgage to one mortgage is the same as applying for a new mortgage with the same lender or a different one.
Although a new lender may offer better rates, remortgage costs should also be considered.
Please visit our standalone guide through the link for more information on removing someone from a mortgage.
Single-person mortgage calculators don’t provide the complete picture
You can easily search the internet for mortgage calculators. However, this calculator will only give you an idea of what you might be able to borrow.
Online calculators are best used for general multiplier functions and will not be as accurate as speaking to an experienced mortgage advisor.
You will not get the entire lender’s numbers if you only go through an official calculator.
We recommend that you speak to an expert if you are considering applying for a mortgage as a single applicant.
They can determine the maximum loan amount from all the markets.
It takes some knowledge and legwork, but it is the best way to see exactly where you stand without relying on incorrect figures that could lead to disappointment.
FAQ
If I am self-employed, can I apply for a mortgage by myself?
Yes, you can! These are the main points to consider:
- Employment Capacity: Lenders may assess sole traders differently than Ltd directors. This is because they will feel the directors’ income from the company. Some lenders will consider the potential share of retained profits that may have been drawn. This could lead to much higher lending figures if the lender is right.
- Accounts Most lenders require three years of accounts. Some may need 2, but most will accept 1. Lenders will be more likely to consider your application if you have been in business for a long and have made more money. Even if your company has existed for a few years, some lenders may still be interested in your application. Specialist brokers, such as the ones we work alongside, will be able to tell you which lenders would accept accounts with less than three years.
- Income figures are Turnover and Profit (salary plus dividends). Lenders will consider your 3-year income. If you have a significant increase in your income most recently, lenders who only consider this year will be able to offer the highest loans.
Can I get a mortgage for one person with a low deposit?
We can match you with one of our mortgage experts if you are interested in buying a property, new or old. They’ll be happy to answer any questions and help you find the best mortgage for your needs at the most affordable price.
Can I apply for a secured loan with only one applicant?
Yes. If you own property and need to borrow money, there are two options: a primary remortgage or a secured second mortgage.
A remortgage is a way to reduce your total debt. It allows you to borrow one loan from the same lender at great rates. Lending a secured loan from a different lender may result in slightly higher fees and rates.
If you are locked into an introductory fixed-rate period, remortgaging may result in fees. You can save these fees by taking out a secured loan. However, you can still borrow more to cover the difference in the amount you need.
Secured loan lenders are more flexible in underwriting loans and will accept more severe credit problems. They can also lend more money, sometimes offering more than 10x income, whereas leading mortgage lenders limit this to 4x. Some will do 5x, while others will do 6x.
If you have a joint loan and need a single secured loan
It is generally not possible for one person or more to obtain a secured loan on the jointly-owned property.
Even if you agree on the percentage ownership with tenants, owning a property together means you must decide on the secured debts. You are both jointly responsible for the mortgage and any additional debt.
If you are in a joint mortgage, the only way to borrow on your own is to get an unsecured loan.
Can I apply for a mortgage under one name even though two people purchase the property?
Generally, no. Lenders will require that all owners be identified to obtain a mortgage on the property.
It is possible to reverse the process and obtain a mortgage under two names, with one owner on the deeds.
This arrangement is called joint mortgage sole proprietor. It allows you to share the liability for a mortgage with someone else who does not have legal rights over the equity. This is a bit like a guarantor loan, but it’s different.
There are many reasons you may want to apply for a single-person mortgage if more than one person is buying the property.
One reason is that your partner might have poor credit, which could result in rejection of your joint mortgage application by some lenders, especially for first-time buyers.
Can I get a single-name buy-to-let mortgage?
Many lenders offer buy-to-let mortgages without a minimum income requirement.
Talk to a specialist broker about which lenders do not require a minimum income for buy-to-let mortgages.