Last reviewed on 22nd August 2023 by Martin Alexander (Mortgage Advisor)
Getting a mortgage as a single parent can be simple with the right advice and approach to your application. Although you may need guidance to get a mortgage, being a single parent shouldn’t hold you back from applying.
There are challenges being a single parent which can sometimes present themselves during a mortgage assessment. For instance, meeting affordability checks can be difficult on a single income, especially while supporting children.
Some lenders are less flexible than others and almost every lender has its own unique scoring system. This is why getting the correct advice beforehand can be the difference between getting a great deal or being declined.
If you’re really struggling to find a lender, you can apply with a specialist lender. This is because specialist lenders offer mortgages to applicants in difficult circumstances, such as being a single parent on a low income.
How to get a mortgage as a single parent
It’s first important to understand how mortgage applications for single parents are assessed. The mortgages available to you as a single parent won’t be that different from those available to joint applicants. This is because lenders don’t have specific mortgages for single parents. The main hurdle for single parents to get past is usually the affordability part of the assessment.
Mortgage affordability as a single parent
Perhaps the biggest factor in getting a mortgage as a single parent is meeting a lender’s affordability criteria. It’s common for single parents to either work part-time or have a low income due to parental responsibilities. As a result, the amount you can borrow may be limited.
Most lenders will lend between three to five times your annual income. This figure reduces with the more children you have. This is because a higher number of dependents will often mean an increase in your outgoings. As a result, lenders will minimise the amount they’d be willing to lend to ensure the mortgage is affordable.
On the other hand, if you have one child or keep your monthly outgoings to a minimum, you may be able to apply for a larger loan amount. Your income and outgoings along with your savings and debt are known as a debt-to-income ratio. This entire overview of your financial profile will give lenders an indication of what’s affordable and what isn’t.
Using child benefit and tax credits toward your application
As a single parent, you’re able to use the following when documenting your income:
- Child benefit payments
- Tax credits
- Maintenance payments (from an ex-partner)
- Income from a job (full-time or part-time)
- Universal Credit
Many applicants think certain forms of income can’t be used when applying for a mortgage but they can. Furthermore, adding the income together can often maximise the amount you’re able to borrow.
As an example, if your benefits totalled £1000 per month, your annual income would be £12,000. If lenders used an income multiplier of four for their assessment, you could borrow up to £48,000 more than if you didn’t include this income in your application. Lenders will also assess your outgoings so please use this example as a guideline only.
Some lenders have certain restrictions on how child benefits can be used toward your income. For instance, some lenders will only allow you to include child benefits if you earn less than £50,000 per year or your children are under 13 years old. Furthermore, lenders may also restrict other forms of income towards your application, such as tax credits and universal credit.
Read more: Can I get a mortgage with benefits?
Your credit history
Lenders carry out credit checks for all mortgage applications, irrespective of whether you’re a single parent or not. This is so lenders are able to assess your credit history.
As you could’ve probably guessed, having bad credit history will make getting a mortgage as a single parent even more difficult. Each credit issue is different and lenders will factor this into their assessment. Recent credit issues can ring alarm bells but more historic issues can have less impact on your application.
If you do have poor credit, speak to an advisor before you do anything else. We’ll then inform you of whether or not a mortgage is possible.
Are there any mortgage schemes available for single parents?
Although there are no particular mortgage schemes for single parents, there are mortgage types suited for those in certain situations.
You can click on each link to learn more about each type of mortgage:
In all honesty, there are many mortgage options available. Even if you have a small deposit and don’t want to use the mortgage types mentioned, our advisors will still be able to help.
Mortgage lenders for single parents
With all the options available and hundreds of lenders to choose from, where do you start? Well, there aren’t any specific lenders for single parents, however, there are specialist lenders for applicants in difficult situations.
You do risk being declined if you approach lenders directly, especially if you haven’t prepared your application. To find the best-suited lender, you’d first need access to each lender and you’d also require an understanding of how each lender makes their assessments.
On a positive note, getting expert mortgage advice beforehand ensures you only apply with suitable lenders. In addition, an advisor can make sure you’re getting the best possible deal you qualify for.
Mortgages for single parents don’t need to be difficult, but without the right expertise, they often are. You can call us on 0800 195 0490 or make an enquiry for more information.
About the author
Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.