October 31, 2023
Are you a student with aspirations of climbing the property ladder, but the complexities of getting a mortgage as a student in the UK leave you puzzled? Worry not, because Simon Blyth Estate Agents is here to guide you through the process. In this article, we’ll delve into student mortgages, first-time buyers’ options, guarantor mortgages, and the importance of your credit score in making your property dreams a reality.
Can Students Get Mortgages?
The short answer is yes! Although there isn’t a specific product known as a “Student Mortgage,” there are mortgage options tailor-made for students. These options often require the support of a reliable guarantor, typically a family member, to vouch for your financial stability.
Lenders assess your situation based on various factors, including your credit history, income, and stability. If you have the necessary support and means, securing a student mortgage becomes a realistic goal.
Eligibility for Student Mortgages
The good news is that your field of study doesn’t significantly impact your mortgage application. However, courses with potential income streams, such as nursing, may provide more options. To be eligible, you need to be over 18, but keep in mind that different lenders may have specific requirements, such as property type or a minimum deposit of 10%.
Available Student Mortgage Options
Here are some mortgage options that may cater specifically to students:
1. Buy-for-Uni Mortgage: This option allows students, backed by family members, to enter the property market with a 100% loan-to-value ratio. Repayments are often covered by renting out rooms, but there are strict property and location criteria.
2. Guarantor Mortgages: Financially stable family members can act as guarantors, significantly improving your chances of mortgage approval.
3. Family Springboard Mortgage: Relatives can contribute 10% of the property’s value as collateral, enabling you to provide a 5% buyer contribution to the deposit.
4. Joint Borrower, Sole Proprietor: This option permits multiple contributors while a single person owns the property.
How to Secure a Mortgage as a Student
Given the unique circumstances of student finances, it’s essential to consult a mortgage adviser. They can offer personalised advice tailored to your specific needs and help you gather the necessary documentation, including proof of deposit or guarantor commitment.
Income Requirements
Lenders have varying policies regarding student income. While some may consider bursaries and stipends, others may not. Your lender’s decision will depend on factors such as affordability, deposit amount, secondary income, future job prospects, and existing debts. It’s important to note that you cannot use a student loan as income for a mortgage.
The MyMAB App: Your Key to the Property Ladder
For first-time buyers, the MyMAB app from the Mortgage Advice Bureau is the ultimate tool to get mortgage-ready. It features savings trackers, comprehensive checklists, and a step-by-step plan to guide you from your deposit to homeownership. Discover how this app can make your journey to homeownership smoother or download it today to experience its benefits firsthand.
Why an Adviser is Essential
Navigating the intricacies of student mortgages is made more manageable with the help of an experienced mortgage adviser. They possess valuable insights into market dynamics, lender preferences, and access to exclusive deals. Partnering with the right adviser can significantly enhance your chances of securing a mortgage for your student home.
At Simon Blyth Estate Agents, we’re committed to helping you make your property dreams come true, even while pursuing full-time education. Get in touch with us today and let’s explore how we can assist you in climbing the property ladder.
Important Information
Remember, if you fail to keep up with your mortgage repayments, your home may be repossessed. Mortgage advice may come with a fee, typically up to 1% of the amount borrowed, depending on your circumstances, with a typical fee of 0.3%.