Remortgage, single income parent

How to remortgage as a single income parent

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Remortgage, Single Income Parent

Time’s up on your current mortgage – and you’re keen to look elsewhere. But as a single parent on a relatively low income, you’re probably concerned that lenders won’t be queueing up to offer you a new home loan.

But there’s no need to panic. There are plenty of mortgage companies out there who will consider applications from single income families, as long as you, as the primary earner, have a solid financial history and can demonstrate that you will have the funds to cover your repayments. Many of these providers will even allow you to free up money from your existing agreement if you need the cash to hand.

When do you need to remortgage?

Remortgaging a property is the process of applying for a mortgage with a new lender without physically moving between locations.

There are a few reasons why you may be considering remortgaging your property. Maybe you simply want to get a better deal and take advantage of cheaper rates elsewhere. Perhaps you need to raise money for home improvements and other large purchases. You can do this by releasing cash from your existing mortgage and upping your monthly repayments or the length of their mortgage term as part of a revised agreement.

Remortgaging can also be a way to consolidate other existing debt and pay it off within your monthly mortgage payments. However, although interest rates on mortgages are often lower than on personal loans, you could end up paying more overall if you choose to take the mortgage out over a longer term.

If you’re looking to remortgage your property, the cost of your new agreement will be one of the biggest factors in your decision-making process. But there are other things to think about – such as whether the mortgage is portable, whether the lender will allow you to overpay on your repayments, what the exit fees are, and whether the term length suits your needs.

How can being a single income parent affect your chances of getting a new mortgage?

Being accepted for a new mortgage as a single parent can be tough, mostly due to the fact that you are unlikely to be bringing in a full-time income.

Most lenders will allow you to borrow up to five times your annual income. This means that if you are on a lower wage because you are juggling work with childcare, your borrowing capabilities will be reduced.

Some lenders can be very strict when it comes to their eligibility criteria, and although every provider will have their own scoring system, many of the High Street lenders are likely to turn you down if you are a parent with a single income. Alongside other checks, many providers will want to take your outgoings into account to make sure you have a sustainable debt to income ratio. Be wary of this when you’re putting together your application.

It’s not all bad news, though. As a single parent, you can use tax credits towards your remortgage application, including:

  • Child benefit payments
  • Income from a job
  • Tax credits
  • Universal credit
  • Maintenance payments (from the child’s other parent)

If you are a single income parent and are looking to remortgage, it’s vitally important that you use a specialist broker, who will be able to put you in touch with lenders who understand your situation and are willing to offer attractive rates and terms.

Why use a mortgage broker?

Don’t throw yourself into the remorgaging process and simply hope for the best. Get expert advice from experienced mortgage brokers. The team here at CLS Money have helped many single income parents like you secure deals from a providers who understand your situation and are open to offering you good rates and terms.

Contact us now to arrange your free consultation and get a series of quotes from niche or specialist lenders with more accommodating eligibility criteria. We know you’re juggling many plates, which is why we offer lots of evening and weekend appointments. And you can talk to us online, over the phone, or in person, depending on what’s most convenient for you.

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Gemma May

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