The only thing that’s more difficult than getting yourself onto the property ladder is doing it on your own. I would probably say it’s one of the most stressful and hardest things to do when the problem is not halved, but it is possible to do on your own.
I wanted to share my honest and true experiences of buying my first home as a first time buyer on my own and what I had to do to get there. There is lots of advice out there from mortgage lenders, but not from someone who has actually had to do it on their own.
This is not definitive advice on how to get a mortgage on your own, but what I did to get there. I’m going to discuss my salary to get there, what I was looking for and where the property was so this post can be as relatable as possible. I purchased my first home back in 2017 and I know that the current property market is not only different to back then, but it’s crazy too!
When I thought about purchasing my home, I was in a relationship at the time but my partner didn’t have a deposit and I wasn’t prepared to wait around for however long it might take to be ready. After living away at university for the last 3 years I was desperate to have my own space again and get on with living, yet didn’t want to pay out dead money each month that I would never see again.
I was very fortunate that I was able to continue saving the majority of my salary each month whilst living at home. I was on an £18,000 salary at the time and it took me two years to get enough money together for somewhat of a deposit.
First Step – Seeking Advice From A Mortgage Advisor
Even if you are not yet at that stage to get a mortgage, I cannot stress enough that seeking early advice from a mortgage advisor will help you to get an idea of your financial situation and the potenial that you could borrow. As a single person that was earning £18,000 at the time I had no idea what sort of properties I could even begin to look at. As I would not have a second salary to depend on, it needed to be something I knew I could afford to pay back each month without leaving me high and dry.
Looking back, I did everything in the wrong order. I had started looking at properties, I knew it was flats rather than houses that would be the most appropriate for my price range. It also had to be something I didn’t have to spend, or do any additional work to. Guys, I didn’t know how to put prints up on the walls until last year.
Unfortunately for me, I decided to look at a flat on my dream street (I genuinely wrote an Instagram post two years prior saying it was my dream street to live on). The rest was history. As far as I was concerned, after I viewed the flat, it was mine and I had to have it. I hate this facet of my personality as there really is no room for budging once I’ve seen the ‘thing’ I want. Ok, I had virtually moved in after my first 10 minute viewing.
I then finally made an appointment to see Sarah Dyer who is part of The Mortgage Guy Ltd – Sarah works remotely and anyone in the country can use her services. I’ve used her twice now for mortgages and she is AMAZING. When I say she will fight a case for you, she will fight a case for you and give you the best mortgage advice that is relevant to your situation. When you’re on your own and getting a mortgage for the first time you really do need a cheerleader like Sarah to help you.
The first steps to finding out how much you’ll potentially be able to borrow is by filling in a fact finder sheet, this compiles all of your incomings and outgoings, debts to work out how much money you can borrow. The flat I wanted was priced at £120,000 but my income was only £18,000 and even with a 10% deposit, the bank would only lend around the 85k mark. It was back to the drawing board. I know knew how much I could potentially borrow and I knew what price bands I could realistically look at without over stretching myself.
You can also work out a brief calculation at what you could borrow with an online mortgage calculator, on a single persons salary it is usually your salary x 4.5 as to what you could borrow. So, for my £18,000 salary it was coming out at £81,000 which wasn’t looking very promising for me. What can you get for that sort of money that has 4 walls and a ceiling?
*You do not need a mortgage advisor to get a mortgage, but they make things hell of a lot easier and take a lot of weight of your shoulders as a first time buyer. I continue to use a mortgage advisor as it’s worth the money over and over again with the advice and money that they save you with finding you the best mortgage deal.
I Needed To Maximise My Income
I cried and cried because I wanted the flat more than anything. The stark reality is that as a single income earner, you have to work twice, if not three times as hard. 2 people earning an £18,000 makes a HUGE difference. One person and it suddenly looks like a 1 bed house in a shithole that has no running electricity and hasn’t been lived in for 10 years. I’m not even being unrealistic at that expectation, and even that’s probably still a stretch. And, even then, getting a mortgage for a walking hazard suddenly becomes impossible too…
In that time, I got the small pay increase that I was absolutely due which brought me to £21,000. Without this salary increase there was no way I would have been able to find a property within my price range and not on a shared equity scheme.
As a single income earner I cannot stress enough that whilst your salary is the most important thing, creating additional streams of income will massively help. Even if that is £100 extra a month, regular bonuses can be included as income too. ‘Side hustles‘ weren’t so much of a thing over 4 years ago, but creating new income from the comfort of your own home is now both easily achievable and possible. For me, additional streams of income also provide a little bit of additional peace of mind. If one stream is suddenly pulled from beneath you, you know there is the additional support if you need it.
The idea is that you also want as few outgoings as possible when you’re getting your first mortgage, although these will still affect future mortgages too. I had nothing on finance at the time, I owned a cheap run around car, my phone bill was a sim only and my only main outgoings other than that were the gym. If I had a car on finance at this time on my salary, the amount I would have been able to borrow would have been considerably less. Look to see where you can shave outgoings off from as this will really help your case, even more so if you are getting a mortgage on your own.
Putting An Offer In On The Property
In the time that I had sought the advice I needed, with a mortgage in principle ready to fire off, the flat had been relisted on the market for offers over £90,000! I honestly couldn’t believe it. I put an offer in THAT day and managed to walk away with a confirmed offer for £97,000. Then the real stress began…
One thing I will say is that property prices in the South West are a lot less than the likes of London and you get a lot more for your money. Whilst property prices have really lifted in this area, they still are considered cheaper than the rest of the country. It simply would not have been possible in parts such as London with my salary. Although salaries are or should be reflective in the given area, living costs are higher so saving a deposit still remains hard wherever you are situated.
Appointing A Solicitor For The purchase
Everyone needs a solicitor to facilitate the purchase of a property. At the time, I went with the solicitor that was recommended by the estate agent. I was lazy, and wanted everything made as easy for me as possible. Looking back I paid around £500 more than if I appointed my own private solicitor, but we learn.
I would try and use a local solicitor if possible, mine was up the line and it just removes that ability to go into their office if you need to, plus it’s just easier to keep things local with a local house purchase. Get a quote beforehand and if happy, ask them to act on the purchase when you’re ready to proceed.
A typical deposit for a mortgage is 10%, this is what I had saved for. During this current climate there is 95% loan to value mortgages where only a 5% deposit is required, this really is fantastic for anyone looking to get onto the property ladder. But you can put down any amount of deposit upwards that you want. There is also shared equity schemes which can be a great way onto the property ladder for those with a single income.
When it got to getting a mortgage offer, the real fun began for me. Because the flat I was purchasing was part of a new development (despite it being in a 200 year old building!) – the lowest loan to value I could get was 85%, I suddenly needed a 15% deposit. Most others were asking for 20%!
Mortgage lenders are much stricter with lending on new builds. Why? This is because they see them as riskier investments, whilst they might seem ‘brand new’ and a great investment now, the possibility of these house prices falling in the early years is a real possible eventuality. I totally get this. Whilst I knew that the location in which I was buying would still (it did!) continue to rise in value, lenders can’t take your word for it.
So, there I was suddenly having to magic an additional £5k out of thin air. What I will say is that your deposit is not handed over until you exchange. You STILL have that time to continue saving. This was absolutely my saving grace. Flats can be a longer and trickier purchase process than houses because they have leases. It took 5 months for the sale to go through, but in that time I had 5 more months to save and get to that figure. Whilst I had to sacrifice a lot during these 5 months, I truly got my dream flat and the higher deposit meant that my monthly mortgage payments were less.
The deposit I needed to proceed with was;
- 85% LTV which was a deposit of £14,550.
Getting A Deposit On Older Properties
There are of course other stipulations that can make getting a mortgage difficult, regardless to your income and what you can borrow. What a bank chooses to lend and how much they will lend to you is based on the potential saleability of the property if they ever had to repossess the property and sell it.
Okay, so you’re wanting to buy the most run down house on the street, it’s still using oil for heating and pretty much needs to be completely knocked down and rebuilt. The issue will come when the prospective mortgage lender comes to do a valuation of the house and they see the state of it. They don’t care that you’ve got all the money for renovations and you’re going to completely gut it and start again. Whilst making a tidy little profit in the process. The lender has to assume the worst, and if they ever had to repossess it, they’re going to have a hard time at reselling.
In a situation like this it doesn’t mean you definitely won’t be able to get a mortgage on it. It usually means the lenders will provide a much lower loan to value so there is less risk for them. The amount they will offer you will obviously vary on the state of the home and the lender. This is just something to be really mindful of if you’re looking at a big project for your first mortgage.
Buy What You Want
My biggest piece of advice that I can give for someone buying on their own for the first time is not over stretching. Whilst I know people will disagree with this because salaries should naturally increase over time, there is nothing nice about ‘just’ having enough left over for everything else during the month during those earlier months/years of your mortgage.
I could have also bought a 3 bed house for the same price as my apartment in a shit area, that needed a pile of work to do. I was told time and time again by people to also never buy a flat because the resell value is harder because most families want a house blah blah blah. Whilst there are certain facets about having a flat which overcomplicates and costs a lot more, including service charges and ground rent, I would have been kicking myself like mad if I listened to the critics.
I ended up with the flat I WANTED, in a highly desirable area that was newly renovated. In those 4 years all I did was add alcove shelving. I sat and lived here happily with low mortgage repayments whilst making a profit that you’d struggle to achieve on a 3 bed standard house in a standard area where you’ve done work to the property. The most important part is that I didn’t go for the unachievable, I went for a modest 1 bedroom apartment that definitely lacked space towards the end – but it was what I wanted and I couldn’t have asked for anything more.
Location really is everything from what I’ve learnt, and definitely one important factor to consider when you get your first mortgage. Unless it’s going to be your forever home, then go for it. The important thing is to buy what you want and not what others want. Probably one of the most underrated things about buying on your own, you can have that pink palace and enjoy it!
Buying A Home On Your Own Checklist
Congrats, if you’ve made it to the end! In summary, if you’re buying a home on your own here’s how I did it;
- Just get started saving for a deposit and have a target – I saved with 10% in mind – (I also had a help to buy ISA which I used to pay £200 into a month)
- Seek advice from a mortgage advisor
- Get to your target deposit
- Revisit your mortgage advisor to get a mortgage in principle
- Start property searching & put an offer in
- Appoint a solicitor for the purchase
- Apply for your mortgage and await your mortgage offer
- Continue saving for those solicitor fees and any furniture/deposit and get ready to exchange!
So, there we have it, buying a home on your own in a nutshell. There’s lots of other things that house buyers should know before purchasing, so ensure you make plenty of research beforehand. It’s definitely hard to buy on your own, but if you can it’s worth the struggle to get there. After getting that first foot on the property ladder, it’s much easier there on in. If you have any questions or comments, please leave them below or feel free to drop me an email.
If you liked this post you might also want to read 6 Months of Being A Homeowner – What I’ve Learnt So Far and what you really need to know about mortgage advisors.