Mortgage for phd student

soxman

Hello!
Does anyone know if banks will lend to a phd student with a partner earning normal good salary? How do they calc how much to lend?
Thnks!

nervousftb_3

The short answer is yes they will lend, but it won't be easy! (I'm a phd student with a partner with normal salary, got a mortgage last year).

Basically alot depends on how much you want to borrow and what deposit you have, obviously the more deposit the better. We found that a lot of banks won't even consider lending to a student (e.g. Britannia), others would in theory but not to us (e.g. Halifax, HSBC) and one eventually did! (C&G). The way C&G calculate it is by taking your partner's full salary into account but only counting a proportion of the phd stipend (think it was around 50-60%).

The best way to do it is to find a whole-of-market mortgage broker, explain the situation in full to them (make sure they understand fully how the stipend/bursary works if you have one, and that it is tax free etc) and let them do all the ringing around for you.

You will also need evidence of how much your stipend is and for how long - if your phd is due to finish in the next year or so then they probably won't lend as you have no guarantee of income after this time. C&G accpeted a letter from my uni stating how much I got and that it was guaranteed until 2012.

So in summary, yes it's possible, but it may take a while! You will need to ensure at every stage that the broker and the mortgage company fully understand how the stipend works (I had to repeatedly explain it to so many people throughout the process!). Good luck!

herbiesjp

As stated above, it can be done.

Lots of hoops to jump through, and constantly changing criteria.

How much they will lend will depend on the whole scenario, and the lender chosen, as each lender has different criteria.

If you definitely need to take the stipend into account, then options will be limited. However rates will be standard high street deals.

If you can get the mortgage based on the sole income, then you will have more doors available.

That is assuming no other "problems" i.e.good deposit, no debts, good credit history etc.

patricia..xx

We are in this exact situation. Some banks were more helpful than others. We did not need the stipend taken into account for income multiples, but we did not want the student to be regarded as a "dependent" because a) He isn't and b) It messed up the affordability.

Scottish Widows and First Direct were fine with it, Yorkshire Building Society and HSBC would not even entertain the fact. Both of those would only offer an £80k mortgage on the single £50k salary. All were happy to refer me direct to the underwriters to explain the situation before credit checks were performed. Went with SW and they have not needed to see anything about the phd income.

PhD.V

I'm in the same situation and we managed to get one at the end of last year. Realising that it would be difficult (originally I thought it would be impossible) we went with a broker who found that basically only C&G were willing to lend to us for anywhere near the amount we needed and that was based on my partner's full wage and 60% of my stipend. We had found a house and were wrangling an offer based on a 20% deposit due to it being a new build (thanks to help from 3/4 parents!).

Unfortunately after getting an 'agreement in principle' and going ahead with the deal my partner failed the credit check dismally - a whole other story and a paid-off debt from 4 years ago. The broker then told us that our only option was to go to the sub-prime market which we really did not want to do, the interest rates were unbelieveable! We couldn't possibly afford the monthly repayments of sub-prime and faced waiting another five years before the OH's credit cleared before any bank would touch us. Yet, just as we thought we had lost our £500 deposit and the house that we had fallen in love with, we were advised by the company that we were renting with at the time to speak to their mortgage broker.

The rest is a bit of a blur, we sent all of the documentation relating to my stipend and my partner's wages to the new guy, heard nothing for a week, then he said that RBOS were willing to lend to us - although I'm still not sure whether that was based on one or both of our 'incomes'. It then went to the underwriters for what seemed like forever, I think it was about 3 weeks, with the new mortgage broker telling us that nothing was final until we had a definite 'yes' from them. In the meantime the sale of the house was going ahead and we just had to wait with our fingers crossed for the underwriters' reply. In the end it came through on the deadline day of the sale agreement and, with an understanding seller, we moved in a week later! I can only think that RBOS check different credit companies than C&G - my partner had a score of about 10% with Equifax but 70% with Experian who hadn't acknowledged the previous debt.

So yes, they will lend to PhD students but usually based on no more than 60% of the stipend and some refuse to acknowledge it at all. But, as my haphazard story shows, it can be done! (Albeit with two mortgage brokers and a lot of luck).

The best of luck with it.

clairet707

Yes they do as others have said...

Id just started mine when we got our mortgage and they took the full amount of my stipend into account.. This was with NR though 4 1/2 years ago so highly unlikely for them to do it again now..

(I didnt finish my PhD but got a job so didnt have a job void after finishing)