Last updated on March 27th, 2022 at 10:17 pm
When you’re a single parent, mortgage dreams can seem like a pipeline idea. Lots of single mums wonder if it’s even possible? Can a single mum get a mortgage? It is, of course, tougher in a single-income household, and any home with children feels the financial blow of the cost of kids.
Can a single parent get a mortgage?
There is no reason why a single parent should not be able to get a mortgage. As long as you have good credit, proof of monthly earnings, and you’re able to pay the relevant deposit, you are eligible to be accepted for a mortgage loan regardless of your single-parent status.
Of course, it might not be a walk in the park to get to that point. For any single parent whose goal is to get on the property ladder, especially in these times, it will take time and hard work to save the deposit. However, shelving your dream and believing that you can’t, means you definitely won’t.
Continuing on with the belief that you’ll never be able to buy a house, is not useful. Even if it’s going to take you ten or fifteen years to make the savings you need, starting now is going to get you there quicker. Not starting at all, means throwing tens of thousands of pounds away on rent for the foreseeable future, and where’s the sense in that?
The steps you need to take to start working towards your single parent mortgage
Step number one is going to be working on your credit score. All of the payments that you make towards finance purchases like your mobile phone or your car, count towards your score. If you don’t already have a credit card, having one will help to improve your score too. Make sure you make all of your minimum payments on time, each month. Never take out a finance deal on anything that you can’t afford the monthly payments for.
Step two is either making sure you’re in work or improving your job prospects. If you’re currently not working because you have a baby or children who aren’t yet in school, try to think about what your plan is going to be for eventually going back to work. Are there any steps you can take to prepare? Would you benefit from taking any part-time courses that you can do in the evenings? Maybe a volunteering role could help boost your CV.
15 Useful Tips For A Single Mum Returning To Work
Step three is saving. Read the next section to find out how…
How to start saving for a deposit
Find the best savings account for you. First and foremost, check with your bank which option would be best for your savings account. An ISA with a good interest rate is a good bet. Sometimes switching banks might even ensure your money is in the best place, and you may even receive a cash incentive for switching.
Think about boosting your income. I’m actually not going to give the same old, unhelpful advice that a lot of single mums get thrown at them on the internet. ‘Get a single mum side-hustle’. No. In my opinion, side hustles often cost money and rarely make it. My advice is to aim higher with your attitude to your capabilities at work. Apply for those higher-paying jobs. Ask for that raise. Put your name forward for the promotion. Why not? If they say no, they say no. If they say yes, congratulations, you’re now earning more and closer to your goals, providing for your family at your full potential.
Create a budget and financial plan. Keeping track of your earnings and being aware of your spending is essential. You need to know how much you can spare each month, to put away. If you’re in any debt or have credit cards, pay that off first and save yourself the interest payments. Again, mindset is very important when it comes to saving a large sum. A long-term goal is as valid as a short-term one. Just because you’ll be enjoying the value of it later rather than sooner, don’t let the goal slip from your mind.
See our free single-parent budget planner here.
Some example figures;
Just to make it all a little more realistic and to put it into perspective for you, here are some example savings plans. Making a plan and setting a time limit, will make your goals much more real and attainable.
£166 a month each 12 months = Saving a 10,000 deposit in 5 years
£156 a month each 12 months = Saving a 15,000 deposit in 8 years
£200 a month each 12 months = Saving 24,000 in 10 years
The more you pay for your deposit, the better, as you’ll get a much better interest rate. But even saving 5K could be a good start, if you plan to use one of the helpful schemes explained in the next paragraph.
What help can a single parent get with a mortgage?
The government is currently running a 95% loan-to-value mortgage scheme, which means first-time buyers will only have to pay a 5% deposit for their mortgage. However, this scheme is only available until December 2022, so you’d have to be near-ready to pay your 5% fairly soon.
A Help-To-Buy ISA used to be a good source of government help, but these are currently closed to new applicants. Instead, you could try a Lifetime ISA
A Lifetime ISA (LISA) can be opened by anyone aged between 18 and 39. You can save up to £4,000 a year in it, towards your first home or retirement, and the state adds a cash bonus of up to £1,000 a year on top.
https://www.moneysavingexpert.com/savings/lifetime-isas/
Shared ownership is also a more affordable option that makes the property ladder more accessible to single parents. It means that you only buy a portion of the home, say 30% or 40%. The rest, you pay rent on, which is not ideal but you’ll pay less rent than usual, and still have the peace of mind that you are a partial homeowner.
Changing your mindset to help achieve your single parent mortgage goal
Top Tip: Creating a vision board could help you keep yourself on track
Like it says towards the beginning of this post, continuing with the belief that you can’t get a mortgage because you’re a single parent is going to mean that you definitely never achieve your goal.
You want to have a good mindset and keep your goal in mind for it to become a reality.
If you’ve never tried it before, I’d really recommend making a vision board for your new home. A vision board is when you get a big sheet of paper, and stick some images and words on it that represents everything you want to manifest into your life. Find a picture in a magazine of the home you’d love to have, stick it in the middle. Then surround it with all the things that you will do, and you will achieve to get there.
You may think this seems like kind of a silly idea at first! But actually, the more seriously you take this, the more you’ll solidify the dream in your mind and start believing that you’re really going to achieve it. It’s about moving your dream of owning a home out of your head and into real physical space. Making it a reality, starting your journey to put your thoughts into action.
A single-parent mortgage isn’t just a dream, it’s my reality.
Shared ownership is the option that I went for, and I’ve been happily paying off a 30% mortgage on my own, alongside a low rent for several years now. My application for the shared ownership mortgage was accepted based on my sole income. And now, as a single parent with a part-time job I’m still able to make my payments.
Financially, I feel much more secure for the future knowing that I have some type of investment under my belt. And I know that I’m actually paying less altogether than I would if I was renting privately.
With a shared ownership home, you also have the option to staircase. This means buying more of the property if or when you find yourself in the financial position to do so. This keeps me motivated to keep working hard, keep saving and improving my financial position for me and my children.
Educating Yourself on Money is Key
If you want more for your life and more for your finances, you might want to spend some time really learning about money. If you’re thinking “What is there to learn? You either have money or you don’t…” then you’re probably like me. I never knew that there was anything to know about money. I didn’t realise that other kids from more financially-savvy families were taking in snippets of information about ISA’s and investment, through listening to their parents talk about their assets and equity.
People who have money, know about money. Money is more than just what’s in your bank – it’s about what you do with it, where you invest it, what type of bank account you have…
So now that you’re finished with your first smart move (reading this blog post), do a little digging on the internet. Go and learn everything you can about savings and mortgages. My favorite resource and a great place to start for financial tips is MoneySavingExpert.com.
Are you starting your journey to get your Single Parent Mortgage today? Say ‘Hi!’ in the comments…
Thanks so much for reading Just-Us-Two.com. If you enjoyed this article, you might also enjoy reading Single Mum Holiday Ideas for 2022 That Are Easy Savers