Is it possible to get a Mortgage on a low income?
If you have a low income you may think that you have little or no chance of getting on the housing ladder in todays very complex mortgage and housing market.
However there are two very different routes that you can consider which may help you get off to a very good start. The first would be buying a Shared Ownership property where you can start by purchasing a 25% share of the property and pay a nominal rent on the balance. The other benefit of this scheme is that providing you have a good credit profile it maybe possible to borrow 100% of the 25% share. If you have a Poor credit profile you would be expected to put down a 5% deposit. This is an excellent way of buying a property with minimal costs, and you have the option in the long term to purchase the remaining share of the property as your income increases.
The other very popular way of buying your first property is to take advantage of the Governments Help to Buy Equity Loan Plan where you are required to put in a minimum of a 5% deposit and the Government will top this up with a 20% deposit. The mortgage that you will have will only be for 75% of the purchase price with no repayment required of the Government loan for 5 years. This may allow you to purchase a property that you would not normally be able to afford with the additional benefit of the attractive mortgage terms that a 75% LTV mortgage would attract. The scheme also allows for an element of Bad Credit that would not be accepted on a normal 95% LTV mortgage application, so again has that additional unexpected benefit.
The overall cost for comparison is 5% APR. The actual rate available will depend on your circumstances. Ask for a personalised illustration.