If you can demonstrate to the mortgage lender that you can afford a mortgage on your own, you can obtain a mortgage under a single name. Generally speaking, the same mortgage requirements apply whether you’re applying for a mortgage alone or jointly with someone else. It’s simply a matter of whether your finances stack up.
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Life throws curveballs, and sometimes those curveballs involve unexpected changes in your financial situation. Perhaps your partner has lost their job, leaving you wondering if you can still achieve your dream of buying a home together. The good news is, even with just one income, a joint mortgage is still possible.
How Does a Joint Mortgage with One Income Work?
A single-income mortgage operates similarly to a traditional joint mortgage, with a few key distinctions. Instead of both applicants contributing income for affordability calculations, only one income is considered. The non-working applicant lists their occupation as unemployed, retired or a homemaker, depending on their circumstances.
After that, lenders evaluate both applicants’ combined income and expenses to decide if they qualify for a mortgage. Taking a broad view, they will make sure that the working applicant’s income is sufficient to pay for both of their expenses, including the forthcoming mortgage payments.
Challenges and Considerations
Securing a joint mortgage with one income presents a few challenges:
- Affordability: Lenders are more cautious with single-income applications, as the burden of affordability falls solely on one individual. This typically translates to a lower loan amount compared to a two-income scenario.
- Interest Rates: Rising interest rates further tighten the reins on affordability. To increase your chances of approval, ensure you have a solid financial foundation and a good credit score.
- Single Applicant vs. Joint Applicant: While a single-income mortgage might seem like a viable option, it’s crucial to understand the implications. A single applicant mortgage assumes only one person owns the property, raising potential issues in the future, especially if you’re a couple.
Seeking Expert Advice
Navigating the complexities of a single-income mortgage requires expert guidance. A trusted mortgage advisor can assess your individual circumstances and provide tailored advice to maximize your chances of securing an affordable mortgage.
The Bottom Line
Even though they come with difficulties, single-income mortgages are still a good choice for couples who are struggling financially. Together, you can navigate this path and realize your dream of homeownership by being aware of the procedures, carefully weighing the implications, and getting professional advice.
Save and budget
It may seem impossible for a single person on a modest salary to save for a mortgage, but it is definitely possible with some preparation, forward thinking, and self-denial.
Determining how much you can realistically save each month for a deposit is a good place to start. Remember, the higher the deposit you can put together, the more attractive you are to lenders. A larger selection of mortgage offers and a lower loan-to-value (LTV) ratio are the benefits of having a larger deposit.
What’s more, having a higher deposit may give you access to lower mortgage rates and better mortgage deals.
Who can get a mortgage as a single person?
If you are a first-time home buyer or if you are a homeowner who may be divorcing your spouse, you can apply for a mortgage as a single person. If you and your partner are in a relationship but your partner has a poor credit history, it could be in your best interest to apply for a mortgage separately.
Your ability to pay back a mortgage is more important than your marital status or whether you would like to borrow money jointly with someone.
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FAQ
Can you get a mortgage if only one of you works?
Can you get a mortgage if your spouse is unemployed?
Do you need two incomes to buy a house?
Can one person get approved for a mortgage?
Can you get a mortgage if you have multiple jobs?
Mortgage lenders usually look into your job history for the past two years to assess your stability and ability to repay the loan. However, some lenders may require a longer job history, depending on the specific requirements and loan program. Can I use income from multiple jobs to qualify for a mortgage?
Can I qualify for a mortgage with only one income?
Take time to add up your monthly obligations and do the math. Knowing your debt to income percentage ahead of time will help you determine whether using only one income to qualify is an option for you. If you still have questions about whether you can qualify for a mortgage using only one income, give Homestead Financial Mortgage a call.
Can you get a mortgage if you have only one name?
Having only one name on the mortgage usually will mean that you will qualify for a smaller loan amount because the unnamed spouse’s income will not count. Although USDA and some other loans are the exceptions. And they will consider the household income, not just the applicant.
Can both spouses apply for a mortgage together?
No, it is not necessary for both spouses to apply for a mortgage together when buying a house or refinancing their current home. In fact, in some situations, having both spouses on the mortgage application can lead to mortgage-related issues.