Mortgage for a student!

hooligan001

Hi everyone, I need your advice! I hope this is the right category to post it in.

Basically, I am currently in my first year at university, and am looking to buy a flat (if it works out to be cost effective) to live in for the rest of my time at uni (probably 3, possibly 4 years).

It is probably relevant to say I am looking at 2 bedroom properties in Aberdeen in a city centre location. I would be renting out the other room to one of my mates. It is possible that after my course at university is finished I would be moving away... So possibly selling up or perhaps continue to rent the property out.

I have found a few places that I like (haven’t viewed any of them yet though) that are on for around £120,000, which is my target price.

So, I will be looking to get a mortgage!

As you can imagine I have no experience of this, so I’m looking for a bit of advice as to what kind of things will I need to prepare before phoning up the bank to get this sorted out?

I guess things like income etc. Are important? I can post information on this if it will help you guys. Will being a student make it very difficult for me to get a reasonable deal?

I would imagine I will need a guarantor; my parents will come in handy for this :rolleyes:.

Please don’t slate me for things that may seem very obvious to you as I said I am looking for advice!

Thanks in advance to everyone!

MX5huggy

How much deposit have you got, how much income?

hooligan001

Could probably manage a £20,000 deposit. My income would work out to be around £10,00 P.A. Hope this is helpful!

morg_monster

Income from what? You don't mean a student loan do you? Because they won't accept that as income.
I'm not sure how sensible buying at the moment is, when you may wish to sell in a relatively short time. I thought I had read somewhere the Aberdeen market was just starting to slow/drop.
I know you said you need advice but I don't know where to start really. the best I can do is say to you that uni is there to be enjoyed, you have a kind of freedom you don't get again ever in your life. You shouldn't be worrying about property ownership, being a landlord, and those kind of issues (and that's assuming you can easily afford the mortgage payments).
Have a look at the Egg mortgage calculator to see how much you'd need to pay for your mortgage each month. Where is that money going to come from? eg £100,000k on 5%, interest only, is £416 a month.

dimbo61

Are your parents in a position to buy a property in Aberdeen and rent it to you for the next 3/4 years.
They would need a good deposit say 20/25% and take out an interest only mortgage for the rest which they can then put against the profit they would make from renting the flat to you and your friend.
Just an idea ! if they are getting a crap return on the money they have in the bank !!

M.E.

Remember Scotland has different letting/buying/selling from England and Wales.
DD1 did buy a flat in Exeter when she was 19 and a student with us as guarantors. Apart from a 'friend' who would not pay her way it has been OK. She is now working and it is her home.
DD2 looked to do the same in Scotland. However the laws are very different and it was not feasible.
DD1 had a mortgage that allowed other students to live with her and pay rent to her. It is not the same as a buy to let mortgage as DD1 has always lived in the flat and the tenants are "unprotected". We did draw up a tenancy agreement that was very fair to the tenants although one 'friend' abused it and tried to stay on even though she would not pay her way. Make sure you ask about the legalities of subletting rooms in Scotland.

PasturesNew

House prices have been falling in most of the UK. Until now Aberdeen has thought it had escaped, but things seem to be catching up with it now.

How would you feel if the flat is worth £80k in 4 years' time?

Kavanne

I bought a flat in England with my bf, a student, as joint holder. NONE of his income could be taken into account - not loans, grants, bursaries or holiday job income.

How can you guarantee you will be able to rent out the other room? If you don't, you will be in trouble paying a £100000 mortgage on your own.

hooligan001

morg_monster wrote: »

Income from what? You don't mean a student loan do you? Because they won't accept that as income.
I'm not sure how sensible buying at the moment is, when you may wish to sell in a relatively short time. I thought I had read somewhere the Aberdeen market was just starting to slow/drop.
I know you said you need advice but I don't know where to start really. the best I can do is say to you that uni is there to be enjoyed, you have a kind of freedom you don't get again ever in your life. You shouldn't be worrying about property ownership, being a landlord, and those kind of issues (and that's assuming you can easily afford the mortgage payments).
Have a look at the Egg mortgage calculator to see how much you'd need to pay for your mortgage each month. Where is that money going to come from? eg £100,000k on 5%, interest only, is £416 a month.

I had calculated that income with part of it being my student loan, the figure would look something like £6000 without (I have a part time job and would also be working full time over summer).

PasturesNew wrote: »

House prices have been falling in most of the UK. Until now Aberdeen has thought it had escaped, but things seem to be catching up with it now.
How would you feel if the flat is worth £80k in 4 years' time?

Yeah, I have thought of this, my idea was initially to find out about purchasing a property and weigh up the costs involved doing this as opposed to renting. Obviously I would be taking into account other aspects such as the uncertainty of the property market in the future.

Kavanne wrote: »

I bought a flat in England with my bf, a student, as joint holder. NONE of his income could be taken into account - not loans, grants, bursaries or holiday job income.
How can you guarantee you will be able to rent out the other room? If you don't, you will be in trouble paying a £100000 mortgage on your own.

I see, so do you think that it would be a struggle for me to actually get a mortgage? Are there any student specific offers available?

As for renting out the room, myself and a group of my close friends are looking for somewhere to stay next year, one of them would live with me.

Just now I am mainly trying to gather information so I can decide which is the best choice for me, so all of your posts have been very helpful!

Kavanne

There are no student offers, only a few GRADUATE ones.

For your situation it may be worth consulting an independent advisor to see if they think there is anything you may be able to get.

Swans1912

Given the uncertainty I think buying a property when earning £10K p.a and a student is not a wise choice. The risks your exposing yourself to are too high, with the reward questionable.

Your aim should be to graduate from university with good grades and little or no debt. If the deposit is your money then you should use it instead of credit!

Enjoy being a student and avoid the worry of owning a home!