What help is available if you're single and buying a house
Buying a home is an exciting time but it could be the biggest single investment you ever make. If you are single and buying a home, it might feel like you are making lots of decisions completely on your own. But don’t lose heart, spending some time researching the schemes and savings options available to you, might just help you lighten the load.
Help to Buy ISA
If you’re saving to buy your first home, saving money into a Help to Buy: ISA can help top up your savings pot. The government will boost your savings by 25%. So, for every £200 you save, you will receive a government bonus of £50. The maximum government bonus you can receive is £3,000.
Shared ownership schemes are aimed mainly at first time buyers, who don’t earn enough to buy a home outright, and are a cross between buying and renting. With shared ownership, you buy between a quarter and three-quarters of a property and have the option to buy a bigger share in the property at a later date. To qualify to buy a home through shared ownership, your criteria should fit the following:
- Your household has to earn £80,000 a year or less, outside of London.
- You are a first-time buyer and used to own your home, but can’t afford to buy one now or you’re an existing shared owner looking to move.
Most of the homes available are newly built, but some are properties being re-sold by housing associations. All shared ownership homes in England are offered on a leasehold only basis.
Help to Buy – equity loan scheme
With a Help to Buy: Equity Loan, the government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won’t be charged loan fees on the 20% loan for the first five years of owning your home.
To reflect the current property prices in London, from February 2016 the Government is increasing the upper limit for the equity loan it gives new home-buyers within Greater London from 20% to 40%.
The Help-to-Buy Equity Loan scheme - which is only available on new-build homes - will remain on offer until 2020, in England alone.
Bank of Mum and Dad
For many aspiring homeowners buying with help from family and friends is their only option to get onto the property ladder. The most common way parents help out is by giving their child some of the required deposit to qualify for a mortgage.
With a guarantor mortgage, a close relative acts as a guarantor on the loan. This does mean that if you are unable to make your repayments, your guarantor will be chased for the cash.
Guarantor mortgage can be useful for first-time buyers as the guarantor’s income is taken into account when establishing how much the borrower can afford to borrow. As a result, you may be able to borrow more than if you were simply applying on your own.
If you'd like to speak to an expert mortgage adviser about what options are available to you, as a single applicant, please don't hesitate to contact us and we'll put you in touch with an adviser local to you.