Though being a student is stereotypically associated with being a little short on money, there are those out there looking to make the investment needed to get on the property ladder. Is it possible to get a mortgage as a student?
Can you get a mortgage?
Yes, you will be able to get a mortgage as a student, though it might not be the easiest of roads. Many students do not have a steady stream of income, something that many lenders want to see in a mortgage application. Even if you are in this position, it is still possible to find lenders willing to provide mortgages to students!
Students over the age of 18 are eligible to apply for mortgages in the UK. There are just a few extra stipulations that you will need to make to ensure that you are in the position to be able to make the long-term repayments expected.
Do you have a steady income?
The first thing you will need to prove is whether or not you have a steady income. This will come from employment or self-employment – after all many students do work while undertaking their degrees.
If you do not have a steady income then you might still be able to get a mortgage. You will just have to provide the details of a guarantor along with your application.
What is a guarantor?
A guarantor is someone who agrees to make your payments if you cannot. This is a legal agreement made in writing, and will usually be a parent, guardian, or some other close relative. If you have previously rented, you might have already dealt with guarantors as part of your rental agreement.
Lenders will want your guarantor to meet a couple of other requirements. For a student mortgage, they will need to be either a direct family member or a legal guardian. They themselves must also be a property owner and must live in the UK with a permanent right to residency. Be aware that some lenders also place a maximum age bracket on guarantors. This is usually about age 80.
In Scotland, you might not need to hold onto your guarantor for the full time that you have the mortgage. If you reach a financial position where you are certain that you will be able to make repayments, you can make an application for the guarantor to be released from your mortgage contract.
What else will I need to apply for a mortgage?
Of course, when applying for a mortgage you are going to need a deposit for the property. This is usually around 15% of the value of the property, but some mortgage brokers are able to negotiate for lower ones when working with students. Remember, if you do try to go for a lower deposit, you are going to have higher repayments to make!
You will also need the help of an expert mortgage advisor to help you negotiate some of the pitfalls of this process. GPD Mortgage Solutions are here to help! Get in touch with us today to help bring your dreams of owning property as a student to life.