If you’re buying a home on one salary, either as a one income family or as a single applicant you may think your options are limited. Whilst you may need to work harder to get the finances you need in place, with planning preparations you’ll put yourself in the best possible position to get into your new home.
Saving for your first home can seem like an endless and thankless task, especially if you’re buying on your own, but stick with it as it will pay dividends in the end.
The bigger deposit you have, the more attractive your business will be to lenders. The more equity you have, the lower risk you represent. A larger deposit also means you will have a lower LTV (loan to value), which in turn will give you access to a wider variety of mortgage deals.
Be realistic about your borrowing
We can all get carried away when it comes to buying consumer goods, but when it comes to buying a property it really is important to make sure you consider your limit and stick to it.
Look at your budget, and consider how much you can comfortably pay each month without forgoing your other necessary expenses.
A lender will advise you regarding the maximum amount you can afford to borrow, it doesn’t mean you actually need to borrow that much. Give yourself some flexibility, and be realistic about what you can comfortably afford on your own.
Do your homework
Taking advice will almost certainly be helpful unless you are very experienced in financial matters in general, and mortgages in particular. However, it’s worth spending some time doing your research to get a basic understanding of the mortgage process and the types of mortgages that are available.
A lender will establish your affordability based on a number of factors including your committed monthly expenditure. If you can reduce this amount by clearing unnecessary debt such as an outstanding credit card balance, you’ll improve your eligibility.
As you’re buying a home with one income, it’s very important to make sure you have income protection in place to ensure that should something happen to you or your job, you can continue to make your repayments.
Use a mortgage broker
Regardless of whether you’re single or not, speaking to a mortgage broker means that you have access to expert advice for mortgages as well as any related life insurance, payment protection and even buildings and contents insurance you may need.
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