Being accepted for a mortgage can often feel like a hoop-jumping exercise. Not only do you need to have a house deposit saved up, but you also need to be able to afford the monthly repayments and provide detailed evidence about your financial situation. This is all much more straightforward if you have a full-time job, but what happens if you have a deposit ready to put down and work on a part-time basis? Here, we look at whether it’s possible to get a mortgage without a full-time salary and why house deposits can help buyers secure their dream home.
Am I eligible for a mortgage without a full-time job?
Lenders will always want to see income stability on mortgage applications. And this doesn’t have to come from a full-time job. If you have a salary that is consistent, and you have worked for the same business for at least two years, then lenders may decide that your employment history is stable enough to secure a long-term loan. Of course, this will also depend on whether your income covers the monthly repayments because while having a stable job will make you seem a less risky investment, you’ll still need to be able to afford the financial commitment you’re taking on board.
Will a larger house deposit help me get a mortgage if I don’t have a full-time job?
In a word, ‘yes.’ Although many factors will contribute to your mortgage eligibility, having a larger deposit will only work in your favour. Some lenders will impose stricter rules on house deposits if you work on a part-time basis, while others may place a bigger focus on your affordability criteria. However, having a deposit will always make you a more favourable prospect because it reduces the loan-to-value (LTV) ratio, which represents how much of the property the mortgage presents. The higher the deposit, the smaller the LTV, and the better the deal you will get.
What will lenders look for?
Along with demonstrating that you’re able to meet your mortgage repayments, lenders will look at your credit history and financial outgoings. They’re likely to do this by checking whether you have been declined for any loans in the past, what current credit arrangements you have in place and whether you’re on the electoral register. Lenders will also want to look closely at your finances to review the money going in and out of your account, such as your monthly bills, travel costs and childcare fees. By taking these extra steps, banks will be in a better position to assess your suitability for a mortgage and whether your financial status qualifies you for a loan.
Is there anything I can do to improve my chances of being approved for a mortgage?
If you’ve ticked ‘house deposit’ off your list, there are still things you can do to boost your chances of being accepted for a mortgage:
- Work on your credit score – if your credit score is low, take some time to repair the damage before applying for a mortgage. Underwriters always study financial history carefully before accepting or declining an application, so improving your credit score should be a priority.
- Watch your spending – Presenting the best version of your finances to a mortgage lender can impact the decision they make and the deal you end up with. Making sure you’re living within your means, paying your bills on time, and reducing any debt you have can make a big difference and change the perception lenders have of your financial situation.
- Talk to a mortgage broker – Whether you want advice on improving your credit score, need some clarity about house deposits, or are unsure what sort of deal to apply for, a mortgage broker can help. Because they have access to different types of lenders, they’ll be able to identify which one is most likely to accept your application and be sympathetic to your personal circumstances.
