As a single parent working part-time, the idea of buying your own home might seem out of reach. With limited income and possibly the responsibility of raising children on your own, it can feel daunting to even consider applying for a mortgage.
But don’t worry, you are not alone in this situation. Many single parents who work part-time have successfully secured a mortgage and bought their own home.
In this article, we will explore the common concerns and questions that single parents working part-time might have when it comes to getting a mortgage.
Can a Single Parent Working Part-Time Get a Mortgage?
Yes, you can get a mortgage as a single parent working part-time. Lenders do not discriminate against part-time workers and will consider your application based on your individual circumstances.
However, it’s important to note that being a single parent working part-time may make it more challenging to secure a mortgage compared to someone with a full-time job.
How to Get a Mortgage as a Single Parent Working Part-Time
There are a few steps you can take to improve your chances of getting a mortgage as a single parent working part-time:
Check Your Finances
Before you start the mortgage application process, it’s crucial to take a close look at your finances. As a single parent working part-time, lenders will want to see that you can afford to make monthly mortgage payments.
Make sure you have a stable income and enough savings for a down payment and other associated costs such as legal fees and surveys.
Consider Government Schemes
There are various government schemes available to help first-time buyers, including single parents. For example, the Help to Buy scheme provides an equity loan of up to 20% towards your new home’s cost, which can reduce the amount you need in a mortgage.
Check Income, Outgoings and Affordability
Before applying for a mortgage, it’s important to carry out a thorough assessment of your income and outgoings.
This will include your part-time earnings, any child support you receive, and any other sources of income. It’s essential to be transparent about these details; any inaccuracies could jeopardize your application.
Note down all your outgoings as well. This includes monthly bills, groceries, childcare costs, transportation, and any debts you may have.
Once you have a clear picture of your monthly income and expenses, you can gauge how much you can afford to pay towards a mortgage each month.
There are numerous online mortgage calculators available that can help you determine what you can afford.
These tools take into account your income, outgoings, and the interest rate on the mortgage, providing an estimated figure of how much you can borrow.
Remember, lenders look at your ability to repay the mortgage. They will consider your ‘debt-to-income’ ratio, which is your monthly debts divided by your gross monthly income. A lower ratio is more favourable as it indicates you aren’t overly burdened by debt.
Seek Professional Advice
Securing a mortgage as a single parent working part-time can be complicated, and professional advice can be invaluable.
Mortgage brokers have extensive knowledge of the market and can guide you to the lenders most likely to approve your application. They can also provide advice on government schemes and other options you may not have considered.
Remember, every mortgage application causes a hard search on your credit report, which can impact your credit score. Therefore, it’s beneficial to get it right the first time. A mortgage broker can help you achieve that.
Can I Get a Government Scheme Help?
Yes, there are various government schemes available to help first-time buyers, including those who are single parents working part-time. These include:
- Shared Ownership: This scheme allows you to purchase a portion of the property (usually between 25-75%) and pay rent on the remaining share. You can then gradually increase your ownership over time.
- Help to Buy: As mentioned earlier, this scheme provides an equity loan of up to 20% towards your new home’s cost. The loan is interest-free for the first five years, after which you will start paying interest.
- Right to Buy: If you are currently living in a council or housing association property, you may be eligible for the Right to Buy scheme. This allows tenants to purchase their homes at a discounted price.
- Lifetime ISA: This scheme allows you to save up to £4,000 per year towards your first home. The government will then provide a 25% bonus on top of your savings, which can be used towards the purchase of your property.
How Much Deposit Do a Single Parent Working Part-Time Need?
The deposit amount required for a mortgage will vary depending on the lender and your personal circumstances.
While most lenders prefer a deposit of at least 10%, some may accept a lower amount if you have a good credit score.
As a single parent working part-time, it may be challenging to save up for a large deposit. However, you can use alternatives like gifted mortgage deposits from family members, guarantor mortgages, or government schemes like Help to Buy and Lifetime ISA to help you achieve your dream of homeownership.
How Much Can a Single Parent Working Part-Time Borrow?
The amount you can borrow will depend on various factors, including your income, expenses, credit score, and the type of mortgage you are applying for.
As a single parent working part-time, your borrowing capacity may be lower than someone who is in full-time employment.
It is essential to speak with a mortgage advisor to get an accurate estimation of how much you can borrow. They will consider your unique circumstances and help you find a mortgage that suits your needs.
Do Benefits Contribute to Income When Applying for a Mortgage?
Yes, benefits can contribute to your overall income when applying for a mortgage. However, not all benefits are considered equal, and some lenders may have specific criteria for accepting them as part of your income.
Some commonly accepted benefits include child maintenance, child tax credit, working tax credit, and universal credit. It is crucial to provide detailed documentation of your benefit income to the lender, as they will need to verify it.
What Documents Will I Need to Provide?
When applying for a mortgage, you will need to provide evidence of your income and expenses. This may include:
- Payslips or bank statements showing your income from employment
- Child benefit or maintenance payments if applicable
- Bank statements or receipts for any additional income
- Evidence of your regular expenses, such as childcare costs, utility bills, and loan repayments
- Proof of identity and address, such as a passport or driving license and a recent utility bill.
Frequently Asked Questions
What is the process of applying for a mortgage as a single parent working part-time?
The process of applying for a mortgage is the same, regardless of your employment status or family situation. You’ll need to provide proof of your income, expenses, any benefits you receive, and your part-time employment status. A mortgage advisor can help guide you through the steps.
Are there any specific mortgage schemes for single parents?
While there are no specific mortgage schemes aimed solely at single parents, some programs could help. For instance, shared ownership schemes or government-backed programs like Help to Buy can be beneficial. It’s advisable to explore all options and speak with a mortgage advisor for tailored advice.
How can I increase my chances of getting a mortgage approval as a single parent working part-time?
Improving your credit score, reducing your debt, and saving for a more significant deposit can increase your chances of getting mortgage approval. It’s also beneficial to demonstrate a steady and reliable income, even if it’s from part-time employment.
Will I need to provide a larger deposit?
The amount of deposit required for a mortgage will vary depending on the lender and your circumstances. Some lenders may require a larger deposit for single parents working part-time, but others may have more flexible criteria. It is best to consult with a mortgage advisor to determine how much deposit you will need.
Can I include child support as income on my mortgage application?
Yes, you can include child support payments as income on your mortgage application. However, you’ll need to provide evidence of these payments.
Are there any specific mortgage products for single parents?
While there aren’t any specific mortgage products for single parents, some lenders may be more flexible in their criteria. A mortgage broker can provide more information on this.
What if I have a poor credit history?
Having a poor credit history can make it more challenging to get a mortgage, but it’s not impossible. Some lenders specialise in providing mortgages for those with bad credit. Again, a mortgage broker can help guide you through this process.
Conclusion
In conclusion, while securing a mortgage as a single parent working part-time might be challenging, it’s certainly feasible. By thoroughly evaluating your finances, taking advantage of government schemes, and seeking professional advice, you can move a step closer to owning your dream home.