Everything you Need to Know About Mortgages for Single Parents

Most people want the security, and enjoyment, that comes with owning their own home. Naturally, that applies to all types of family situations, including single parents. But a person with dependents and a one-salary household can sometimes face a few extra hurdles when securing a mortgage.

Mortgages for single parents need to consider a number of different factors. Some of these apply to families where there is more than one parent applying for a mortgage. Other circumstances are unique to you, as a single parent. They can be problematic, but they should in no way stop you from applying for, and securing, the right mortgage to suit your family’s needs with the help of a mortgage broker.

What kind of mortgages for single parents are available?

According to the Office of National Statistics, in 2019 there were 2.9million single parent families, making up almost 15% of families in the UK. That’s a huge number. Yet there are no specialist mortgages for single parents.

Mortgages for single parents are usually remarkably similar to those for joint applicants. However, the main difference you’ll find is how your application is assessed. This usually requires you to meet certain affordability criteria.

There are some types of mortgage that may be more attainable if you’re a single parent. For example, you could consider shared ownership schemes or apply for a mortgage using a guarantor. However, they’ll still need to be applied for in the same way, by proving you can afford the repayments. And, of course, you may wish to own a home yourself outright.

Naturally, mortgage lenders are keen to get you on the books. Yet they need to be confident that you’ll make the repayments. It’s here that payment surety as a single parent becomes the key consideration, and can be tricky to prove.

Can I get a mortgage as a single parent?

Of course. You just need to consider your income, and may need the support of a mortgage broker to help you do that.

It’s common for single parents to have a slighter lower income than co-parent households. This is largely due to the difficult balance between sole parenting responsibilities and earning a wage. What’s more, if you’ve recently taken a period of maternity or parental leave, you may not have the full salary history you need to secure the mortgage you wish.

Yet mortgages for single parents are absolutely viable when you take into account the amount you can borrow based your income. So working out exactly how that income is made up is important, as mortgages for single parents consider much more than just your salary.

What’s the difference between income and salary?

Your salary is the money your employer pays you, or that you earn from the work you do (perhaps as a self-employed person). Your income, however, is any money that you receive, and it’s particularly important to make the distinction when you’re looking at mortgages for single parents.

Your mortgage is based on your income, not your salary, which has big advantages for single parents. Your income can have many sources. As well as your salary, you may receive money in many other forms, such as Universal Credit, child tax credits, child benefit, and child maintenance payments from a former partner. Many people applying for mortgages for single parents are surprised to learn this income – usually – factors into your affordability, and contributes significantly when totalled up. It’s also particularly advantageous if you have young children. This is because lenders are more likely to consider child payment income received for smaller children, and your childcare costs for them are likely to be higher.

Your non-salaried income can be fairly substantial, and typically from reliable income sources. So they’re an essential consideration when applying for mortgages for single parents. A mortgage broker will advise you as to which mortgage lenders consider which areas of your income when assessing your application.

Do I need to provide evidence of my outgoings?

Yes. And mortgage lenders will expect your outgoings as a single parent to be fairly substantial. For example, you might have high childcare costs and be making current rent payments. Lenders will look at your income minus your outgoings to assess affordability. The higher your affordability score, the greater chance you have of securing a mortgage as a single parent.

Affordability can be more challenging for single parents than couples. For example, a married couple with two salaries will be considered to each pay 50% of the council tax bill. A single parent with one salary will be paying 100% of that cost. This is a big discrepancy, which can have a huge effect on your ability to meet mortgage lenders’ affordability criteria. Therefore, it’s important that you include all your income – not just your salary – as this will significantly help balance your outgoings.

It’s here when working with a mortgage broker really helps you. Applying for multiple mortgages for single parents, only for lenders to keep rejecting your applications, can be time consuming and demoralising. Yet a mortgage broker, like trufe., will be able to assess your application on your behalf. They’ll use experience and expertise to go to the mortgage lenders who are most likely to accept your application, saving you stress, potential upset, and a great deal of time and hassle.

What happens if I’m going through a divorce?

It’s true that divorce proceedings, or any kind of formal separation, can slightly muddy the waters when applying for mortgages for single parents. This is especially true if you already have a mortgage. If you took out a joint mortgage with your ex-partner, you agreed to be equally liable for the debt until the mortgage is paid off. This applies even if you no longer live in the house.

If you want to continue living in the home with your children, but wish to no longer have joint mortgage liability with your ex-partner, you can borrow money to fund this – provided you can prove affordability. This would be assessed as a mortgage for a single parent, based on the fact you would now be living in the home as the only adult with dependents.

However, there can be advantages for you here. If you choose to sell your share of your former home to your ex-partner, you may be able to get a substantial amount of the money you need to put towards a deposit, or pay off debts and improve your affordability score.

If your home is in negative equity when you divorce, speak to a mortgage broker for advice.

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How can a mortgage broker find the right mortgage for me?

A mortgage broker is a huge support for you when you’re facing the challenging questions that might sometimes come up when you’re applying for mortgages for single parents. For example, some mortgage lenders look more favourably on child maintenance payments than others, so a mortgage broker can guide you towards those more likely to support your application.

A mortgage broker understands your personal challenges, helps to manage your expectations, and knows which mortgage lenders are most likely to approve your individual application.  They know which questions will be asked, and when, and can help you prepare the documents you need to demonstrate how you’ll be able to afford every monthly repayment.

As a single parent, you’re no doubt facing a lot of challenges alone. But with trufe. on side, we’re here to guide you through every step of the process of applying for mortgages for single parents.

Get in touch for an initial chat. There’s no obligation, and our team can be flexible around your working patterns and childcare commitments.

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