Singles, don’t give up on taking out mortgage

SINGLES can struggle when seeking a mortgage but it doesn’t mean they should shut the door on home ownership.

Some State Government authorities provide shared equity loans and other options for lowerincome earners who can’t get a mortgage from mainstream lenders.

There are parental guarantee loans and government grants, and the new First Home Deposit Scheme starts on January 1.

Single mother Jessica Hunter, 24, built a new $240,000 home for herself and son Jack, 3, with just a $4500 deposit and help from a broker, a first homeowners grant and lender HomeStart Finance.

Her advice to other singles is simple: “Ask questions and don’t just assume that you won’t be able to achieve it.”

“All you hear is how impossible it is to get a home loan, and especially with being single or also being a single parent it really makes you want to give up before you start,” she said. Ms Hunter said her $839 monthly repayments now were cheaper than rent.

It’s always harder to save a deposit with just one income, so singles should aim to put all spare or bonus cash into a separate account. Establish a history of savings, banish bad debt such as credit cards and seek advice early.

Some lenders will recognise casual employment income and Centrelink payments when calculating your ability to repay.

Cooper Financial Connections managing director Peter Cooper said a good, experienced adviser could help people get approved as an exception to a lender’s policy.

“If you have been paying rent for some time some banks will accept rent as almost genuine savings,” he said. “There are so many variables from one bank to the other. If your bank says no, it may well mean it doesn’t qualify with that bank.”

But others could be happy to lend, Mr Cooper said.

HomeStart Finance chief executive officer John Oliver said it was important to monitor spending, set a budget and be realistic about affordability.

“Single parents often have to juggle the demands of childcare fees, school expenses and general household costs, all with limited money coming in,” he said.

“If you know someone who has been in your shoes previously, seek counsel from them.”

The Federal Government’s First Home Deposit Scheme will allow 10,000 people to buy housing with a 5 per cent deposit while the government guarantees 15 per cent.