student and only recently employed (but yet to start) first time buyers... tips/help?

jmd4eva

Hi there,

I'm a 20yo student, (£5000 year part time income), and my boyfriend starts his new job as a collections advisor at the start of March (3 month probation on £15500, then £16000).

We have been looking at a shared ownership flat through Asset Trust Housing in Bournemouth - really nice. We were looking at purchasing a 12.5% share (£24369) with a £5000 deposit, gifted from a family member.

However an advisor at the share-to-buy website said that we would be unable to secure a mortgage as lenders would not touch us because my partner is/will be on a probation period... But I have seen some threads on here where people advise Skipton, Chelsea and sometimes Nationwide don't mind...

Any advice?


Thanks! We are looking to move forward quickly, as our current tenancy runs out at the start of July!

JA1000

Why not just wait 3 months??

jmd4eva

The flat we are looking is a new build (2008) and for some reason, they still haven't sold it...So we think they will be reducing it quite drasticly. It was originally £210,000, now has dropped to £194,500, and we would offer based on £190,000. With mortgage rates low, value of property expected to rise soon after exit from recession.... we want to move quickly. And plus, 3 months would take it to the start of June, leaving only a month until our tenancy runs out.

Annisele

I'd advise you to be very, very careful about going ahead with a purchase on a shared ownership flat that hasn't sold for over a year...

You'll find quite a few horror stories about people who can't actually sell their share of a shared ownership property, and end up stuck there. If it took the developers more than a year to sell, you'd have to think about what you would do if it took you more than a year when you wanted to move on.

Is there any particular reason you are set on buying rather than renting? As a student, the flexibility of renting - so you can get a job wherever you want once you've graduated - might be attractive. There's also no guarantee that house prices will go up when the economy picks up - and even if they do go up in general, there's no guarantee that the particular flat you've bought will go up in value. (My own view is that house prices are likely to fall relative to average wages, but that's a discussion for another board). You're right that interest rates don't really have anywhere to go but up - but unless you fix for the life of your mortgage you'll still end up paying those higher interest rates at some point.

Also, you're looking at being responsible for the rent/mortgage, and service charges, on a ~£200k property with a joint salary of only ~£20k. Lenders might get a bit etchy about the affordability of that. Since you're a student, lenders might also be worried about student loans - do either of you have any debt already?

So far as your mortgage question is concerned, am I right in assuming that as of right now your boyfriend doesn't actually have a job? If that's the case, you'll find it near impossible to get anywhere with a mortgage until he does.

If you're sure you want to go ahead with the purchase, then you're best bet is probably to find a whole-of-market adviser (not one attached to the developer) and see what s/he says.