Getting a mortgage on a single income - is it doable?
Single-income mortgages can happen - some of my clients are living proof! But you’re definitely going to need a plan, patience and some realistic expectations about what the banks are going to need from you, and how they view your situation.
With the right help (that’s us!), you can make it happen!
Firstly, your most important card to play will be steady income. When you’re the sole income earner for your household, stability is going to be key. Banks want to see consistent, reliable income, with no surprises.
Ideally, you’ll have been in your current job or career for 6-12 months or more, you’ll have pay slips, bank statements and maybe a letter from your employer ready to go. If you’re self-employed, the rules will be a little tighter; you might need two years worth of financials to back up your application.
You’ll also need to show that your solo income can cover the mortgage repayments, all your living costs and any existing debt obligations. The more you can reduce or control your expenses, the more borrowing power you’ll have!
The banks want to know if you can budget well, if you’re financially consistent and disciplined when it comes to paying bills and other debt. The best way to package yourself as a strong mortgage candidate is to work with a mortgage adviser - we can help you present your application in the best light, and if there’s anything that needs work; we can help you improve it for a stronger application, before we even get to the banks.
Now, let’s talk about that deposit. A 20% deposit is ideal, but it’s not essential. The Kāinga Ora First Home Loan Scheme might be able to help you - if you earn $95,000 or less, you could buy with as little as a 5% deposit. But it’s important to remember - the smaller the deposit, the more interest you’ll pay!
So, here are my quick fire tips for a solo mortgage application:
Cut down non-essential expenses where possible
Aim to build your deposit as much as possible
Keep your credit clean with on-time payments
Work with a mortgage adviser to help you put the best foot forward and get you the best deal
If you’re in the market for a mortgage as a solo applicant, honestly, having that first conversation with a mortgage adviser is the smart move - we can help you see what position you’re in, make a plan, give you some realistic timeframes and guide you to build out the best possible application. And then we’ll be with you through the whole process so while you may be solo, you don’t have to do it alone!
