Buying a house on your own: We explain how to do it

Written by: Kerry Santucci CeMAP MLIBF

Lots of people buy a home without needing a co-buyer.

Many mortgage providers are open to lending to individual applicants, provided you can demonstrate that lending to you is a safe choice.

This guide will show you the steps to enhance your chances of receiving a favourable mortgage offer and purchasing a house by yourself.

Many individuals choose to buy a house independently. If you’re considering this route, rest assured, you’re in good company. There are numerous options available for solo homebuyers, along with professionals who can guide you through the process.

Reasons for Choosing a Single Person Mortgage

There are many circumstances where you might find a solo homeowner mortgage appealing.

Perhaps you’re a first-time buyer not ready to commit to a joint purchase, or you may be eyeing a second property for buy-to-let purposes solely for yourself. Situations like a partner having low income or a poor credit history can also make it challenging to secure a mortgage together.

It’s also common for individuals who are separated or divorced to purchase their own home. Additionally, some opt for remortgaging to take a former partner’s name off an existing mortgage.

Mortgage providers are familiar with these varied reasons for seeking a mortgage based on a single income.

Can a Single Person Get a Mortgage?

Certainly, a single person can secure their own mortgage.

The primary concern for a mortgage provider is assessing the level of financial risk involved. Being a solo buyer has its own advantages and disadvantages in this context.

A clear disadvantage is that your purchasing power is typically less than that of a couple. This could lead lenders to assume that your budget for mortgage repayments might be lower. However, a benefit is that you might be looking for a smaller property, which means the mortgage amount you require could also be smaller.

Another advantage is not having to factor in another person’s poor credit history, which can sometimes hinder a joint mortgage application. If you have a solid credit history and can demonstrate your ability to afford the mortgage, there’s a strong likelihood that your application will be successful.

How a Single Person Can Afford a Mortgage

If you’re at the beginning stages of looking to buy a house by yourself, it might seem daunting and out of reach, but this isn’t necessarily true.

Climbing the property ladder involves more than just saving money; finding a suitable mortgage can significantly bring your goal of homeownership nearer.

Here are some strategies to help you financially prepare for a single person mortgage:

Be Realistic About Your Property Choice

As a single buyer, a smaller home might suit your needs perfectly and be more affordable. Additionally, first-time buyers often benefit from stamp duty relief on the first £300,000 of a property’s value, potentially saving you a significant amount. Remember to account for additional expenses like solicitor fees, mortgage fees, moving costs, and any home improvements in your budgeting.

Explore Shared Ownership Options

Shared ownership doesn’t mean sharing your home with someone else. It allows you to buy a portion of your home and rent the rest, usually from a housing association. These schemes often require a smaller deposit and might offer the opportunity to buy the remaining share in the future.

Look into Shared Equity Schemes

Some property developers offer shared equity schemes where they lend you part of the deposit. This loan is typically low-interest and may not require repayment in the initial years of ownership.

Consider Help from Family

If possible, family members like parents or grandparents might be able to assist. They could gift you funds to enhance your deposit or use equity from their property. Another option is having them act as a guarantor on your mortgage, providing additional security to lenders.

How Much Can a Single Person Borrow?

The amount a single person can borrow for a mortgage primarily depends on their affordability, which is a detailed assessment of income and outgoings by the lender.

Lenders now take a comprehensive look at a buyer’s financial situation, including income sources like bonuses and overtime, as well as expenses ranging from rent, food, clothing, commuting costs, to any other outstanding loans.

The traditional method of simply multiplying your salary to determine borrowing capacity has evolved into a more nuanced evaluation of your financial health.

Therefore, it’s beneficial to get financial advice to ensure your finances are in optimal condition for mortgage approval.

Age is another factor in determining how much you can borrow, especially if you’re over 40. Lenders may offer a lower borrowing amount due to the reduced time frame for loan repayment before retirement.

However, there are options available. Some lenders specialise in mortgages for older borrowers, and a mortgage broker can help you access these tailored deals.

Additionally, there are specific schemes like Retirement Interest Only (RIO) mortgages and the Older People’s Shared Ownership scheme for those over 55, which can offer more flexible borrowing options.

Using an affordability mortgage calculator can give you an estimate of how much you might be able to borrow, based on your individual circumstances.

Securing the Right Mortgage

Initiating the process of buying a home on your own starts with obtaining a mortgage in principle.

This is a preliminary approval from a lender indicating the amount they might be willing to lend you, based on an initial assessment of your finances. To find mortgage options that align well with your financial situation and needs, it’s advisable to consult a mortgage adviser.

They can offer guidance on specialist mortgages tailored for single buyers and assist you in applying for various schemes designed to enhance your deposit, ensuring you get a mortgage deal that’s a good fit for you.

How a broker can help

A mortgage broker can be an invaluable resource for single buyers looking to secure a mortgage.

They provide access to a broad range of mortgage options, including some not available to the general public. With their expertise in the mortgage market, brokers offer tailored financial advice and can handle complex applications, such as those involving irregular income or self-employment.

They assist in navigating deposit-boosting schemes and save time by managing the necessary documentation and communication with lenders. Additionally, brokers can offer personalised support throughout the mortgage process and may negotiate better terms, making the journey to homeownership smoother and more accessible for single buyers.

Kerry is an award winning mortgage broker and Head of residential and buy to let mortgages.
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