Like many things, the home-buying process is very much geared towards couples, even though most people would reject the idea that we have to pair up before we’re ready to move forward in our lives and be proper grown-ups. Up until the late noughties, it was reasonably common for people to buy their first property as a sole buyer, but as house prices have rocketed and mortgage lenders have become more cautious, it’s become trickier to get that foot on the ladder without another person. The covid-19 pandemic has only served to further exacerbate this, with lenders pulling up the drawbridge and tightening eligibility criteria.
As infuriating as this is, there are some solutions out there to make it easier for you to pursue your home-owning dreams without having to complete Hinge first. It may take a little longer, and you may need more expert advice, but it is possible.
Saving the deposit
The size of the deposit needed for buying your first home is fairly intimidating, even when you’re splitting it two ways, so it’s completely understandable if this feels like a big hurdle. Your deposit and affordability are the two most challenging elements of buying a home on your own, and this first one will require some discipline and dedication.
Get into the habit of setting aside as much of your income as you possibly can, in order to build your deposit, and make sure that you’re taking advantage of government schemes like the Lifetime ISA if eligible, too. If your plan is to buy a few years in the future, you might like to look at investing as a way to grow your money. A digital tool like Nude, which combines the planning and saving elements of homebuying, could really help you with this.
Exploring your mortgage options
There are so many different mortgage solutions out there, some of which are more suitable for sole buyers. The new, government-backed, 95% mortgage scheme could help you to get on the ladder quicker by reducing your deposit requirement, but borrowing 95% of the value of your home on a single salary might prove difficult, depending on how much you earn.
It’s a great idea to speak to a mortgage advisor, and use online calculators like Habito’s to work out how much you might be able to borrow.
Making sure your credit score is tip top
One of the main issues for mortgage lenders with sole applications, is the amount of risk involved. When you lend to two people, if one of them loses their job, there is usually another income to tide them over. So, to balance out this risk, you need to try and make it clear to prospective mortgage providers that you are a solid bet, and much of that can be achieved by working on your credit score.
Use the three main credit reference agencies: Experian, Equifax and Transunion, which you can access free using Moneysavingexpert.com’s Credit Club, ClearScore and Credit Karma respectively, to make sure that all of your info is correct and up to date. You can then use a service like CreditLadder to report your rent being paid on time each month, and Experian’s Boost feature to count things like digital subscriptions and council tax payments towards your score. All of this helps lenders to get a better picture of what kind of borrower you are.
Creative solutions for if you have family support
If your family are in a position to help you, but perhaps don’t have access to the cash they would need to bump up your deposit, there are a few other ways they can help you out.
Companies like Tembo are thinking outside of the box to help people get into the ladder and pay less interest, with their Boost feature allowing people to increase their deposits, get better rates and reduce the affordability pressure on sole buyers with single incomes. Other options you can look at include guarantor mortgages and joint proprietor, sole tenant arrangements, but it’s essential to read all of the fine print and have solid agreements in place, if you go ahead with any of these options.
So, there we have it. More complex, but not impossible at all.
For a searingly honest insight into the homebuying process as a female sole buyer, you might want to check out Otegha Uwagba’s memoir, We Need to Talk about Money (4th Estate 2021), which is published on 8th July.
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