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The UK's Comprehensive Finance Resource |
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You've got the degree, you've got a decent job and the prospects look bright. OK you may have some student loans to repay but you feel you've joined the "grown up" world (whether you like it or not). But the surest sign of membership of the "grownups club" is home ownership and a mortgage. And currently that is being denied you by spiralling house prices and mortgage lenders who fail to see your future potential.
Finding a Mortgage for a GraduateAs a graduate, probably on a good but not stunning income and with little in the way of capital behind you, it could be a struggle. Here are a few excellent possibilities: Are you employed by a FTSE 100 or FTSE 250 company?If so, we have a brand new scheme for you.
Sounds Good? Apply for a Graduate Mortgage If you don't qualify for this scheme, perhaps you can enlist some help to achieve that all-important purchase. A joint mortgage for Graduates?But not a guarantor mortgage. It involves your parent being a party to the mortgage, allowing their income to be included in the calculations. And even if they have mortgage commitments of their own, these can be allowed for in a very advantageous way. The following example illustrates how the calculation works: Suppose you are earning £22,000 a year. Normally the maximum loan would be four times salary ie £88,000. In order to purchase a two bedroomed house valued at £140,000, a deposit of £52,000 would be required. But this is how it could look if your dad is prepared to help out. Let's say he earns £45,000 a year and has a mortgage of £50,000 on his own house. Under the special scheme, the income calculation works as follows:
The mortgage is a joint one between parent and child but ownership of the property need not be joint; it can be in the sole name of the child if that is preferred.
Fancy a joint mortgage? Graduates Apply Online Now Help with the depositIncreasingly, parents and other close family members such as grandparents are helping graduates to get a mortgage by agreeing to provide the difference between the purchase price and what can be raised as a mortgage. A recent survey showed that the average first time buyer loan is 77% of the purchase price (source:CML). On a purchase price of £150,000 that means a loan of £115,500 and a deposit of £34,500. One way of making this possible is for parents to re-mortgage their own homes, releasing the money for the deposit. Got help with your deposit? Apply for a Mortgage Now Guarantor Mortgages for GraduatesIf you are a graduate in a profession such as a doctor, dentist, vet, solicitor, you may be able to borrow up to 100% of the purchase price provided a parent is prepared to act as a guarantor for you. The parent is jointly liable for mortgage payments but the mortgage is not a joint mortgage. Suppose you are a trainee solicitor on £22,000 a year and thus eligible for a guarantor mortgage. Dad is on £45,000 a year with a mortgage of £50,000. In this instance the lender would gross up Dad's income ie £45,000 x 4, which is £180,000 and then deduct his mortgage, leaving a figure of £130,000. Your income cannot be added back in because the mortgage amount is already beyond what could be borrowed without a guarantor. So the maximum loan under a guarantor scheme would be £130,000. As you can tell, there are quite a few possibilities for graduate mortgages so use the enquiry form to provide a few details. Our preferred graduate mortgage advisers, Graduate & Professional Financial Services, will get in touch and let you know what they can do for you. |
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