ADVICE NEEDED - Uni debts, Mortgages and pension

hotlymet

HI, I am new to this forum, my name is Zac i am 20 years old going into my 2nd out of three years at university studying BSC Computer Networking.

The main advice that i was looking for is what to do when i leave university in 2 years time and how/when to get onto the property ladder.

By the end of my university course i will be in debt of around £20,000 £18,000 to student finance co and £2000 overdrafts.

I recently watched a TV program where i saw Martin give advice to a male in a similar situation to me and im not sure if i understood what he said. It went along the lines that he should pay all his debts off first, If this is true i immagine that ill get onto the propperty ladder aged 30-35.

I know its hard to say but i would like to get a mortgage in 2013-2014, at that time i immagine i'll be earning £600+pw or £31,000 pa. What size of mortgage shoul i be looking at?

Thanks Zac

Kajimba

Hi Zac,
welcome to the forum!:)
I'm new myself, so I won't comment much.
However, you imagine you'll be earning £600+pw or £31,000 pa in 2013/2014. Where does this projection come from, given the average graduate salary is 22-24,000 p.a?
I think at the moment there's a prospect house prices will drop further, which means some one getting a mortgage right now would be a risk of dropping into negative equity (house worth less than the original mortgage), whereas that might be less likely in three years time! Most debts will mean that mortgage lenders will ask for a higher deposit/ offer higher interest rates, but I think student loans are exempt from this. I'm sure some one more informative will be along shortly.

Fang_3

You shouldn't. You should be saving. Is there a reason that you can't work part time to get rid of your overdraft? Then you need to save, save, save for a decent deposit. Then you can consider a mortgage, not before.

Kajimba

I'm not sure part-time work would be a good idea if he's still studying. Plus job prospects tend to be better if you do internships (often expenses only) rather than bar/ retail work.

I may be slightly biased, as I worked part-time through my undergraduate degree and ended up just missing out on a first. This has meant having to fund both a masters and a PhD by myself, so a loss of around £40,000.:eek:

I know Zac is planning on a job rather than further study, but that means he needs to make himself as employable as possible: many of the part-time jobs available to students might not do that.

DarkConvict

The 3rd year is where the marks are. At least at my university, the 3rd year is worth a whooping 70% of your degree. And i know many students who worked alot in the 2nd year to earn money and on placement, then did no work on their 3rd year, so they could concentrate on the studies.

But it all depends on what you want out of university. Experience in your chosen careers will do you well for getting the first job, but you really need a 2:1 or above in computing. Many places like Logica, Microsoft, Accenture, IBM look for a 2:1 or higher just to pass the online application stage.

Masters and PhD will be funded by working at the university in most cases as a part time lecturer, or via grants/bursaries.
If you do well you could apply to go for a KTP but they are hard to get. Basically you do any course at university for 2 years whilst doing a full time job. The university course is paid for you in that time whilst you work.

Student loans do not appear on the credit file, so will not affect a mortgage rate.

Getting a mortgage is possible, but as they say £600 a week is a ~£32,000 salary. For I.T. that does push you towards central london where a mortgage is out the question due to house prices.

I.e. Logica placement salary is £14,900, and graduate is £18-25k. The higher the figure the closer to london. But as you reach outer london renting costs ~£400 or more.
Also remember you will be paying 20% tax, so that drops you from £32,000 to £25,600 to actually spend. Many large companies do offer mortgage schemes where they match whatever you put into it for 3 years. Which is a good way to start.

Oldernotwiser

Zac_Holt wrote: »

HI, I am new to this forum, my name is Zac i am 20 years old going into my 2nd out of three years at university studying BSC Computer Networking.

The main advice that i was looking for is what to do when i leave university in 2 years time and how/when to get onto the property ladder.

By the end of my university course i will be in debt of around £20,000 £18,000 to student finance co and £2000 overdrafts.

I recently watched a TV program where i saw Martin give advice to a male in a similar situation to me and im not sure if i understood what he said. It went along the lines that he should pay all his debts off first, If this is true i immagine that ill get onto the propperty ladder aged 30-35.

I know its hard to say but i would like to get a mortgage in 2013-2014, at that time i immagine i'll be earning £600+pw or £31,000 pa. What size of mortgage shoul i be looking at?

Thanks Zac

When Martin said pay off your debts first, he didn't mean your student loan, in fact he specifically says that you should pay this off as slowly as possible and never pay anything extra off it.

hotlymet

Firstly may i say thank you for your quick replies,

At the moment i have a good part time job creating the layout of an online magazine, from this i work 2-3 hours from home each week day and recieve £1000 pm, I am going to put aside £150 from my next wage to pay off my overdraft.

After taking a look at sites such as reed and computerweekly there are quite a few jobs offering over 40K pa away from london and closer to home so it's not too much of a worry (the rate of pay) for me personally at the moment. Although the first year doesn't count really i passed with a distinction (81%) and hope this success continues in years 2 and 3

I agree with houses being likely to drop further in the next few years and i wouldn't mind buying a cheaper house that i can rennovate and eventually sell for a profit.

A point that i missed on my original post on pensions, as soon as i am employed full time i know i should start paying into my pension but how much should I? and is there anything i should look out for?

Thanks Zac

DarkConvict

I got
Year 1 (93%) (Degree value 0%),
Year 2 (90%) (Degree value 27%),
Year 3 (100%) (Degree value 70%),
Total 97%.
So for me the grades did continue, although i did have a very difficult 2nd year looking after my mom.

Many of the jobs i have seen are advertised as salary based on experience. You need to get atleast a few years of experience before you get the high paid computing jobs, unless you have a special skill in high demand.

In terms of a pension, it is a good idea to start it when you start working, but do check different companies, places like Logica have pension schemes. BT used to but stopped it in about 2005 to new entrants due to a multi-billion under funding issue.

hotlymet

Well done on your degree:T

I will check around for a pension nearer the time,

Do you know any good employers with good career prospects in the field of Computer Networking? and do you think it would be any use if i started asking for jobs now? (although i have two years left and don't know what result i WILL get)

DarkConvict

All i can say is the averages about people come out of a technology degree.

All to high proporation of all degree students don't actually get degree level jobs anyway, you need the right mindset to follow though a career. Some of my friends still work in retail outlets no longer part time as uni is over but now full time.

Although other friends have gotten jobs from between 16,000 - 24,000, and one person in central london took an offer for 32,000 although she had previous placement experience at the same company. But then again it is london and living allowances will eat extra £1000's.

For those that do go for jobs in there field, you will find you need to be flexible. At logica, myself a placement software engineering student, a MSc physics student, a placement student in electrical engineer and a PhD student, all ended up doing pretty much if not the same job, software testing, i sought out a better position other than testing and got onto a highly involved development project. The qualification doesn't give you the wage, the experience does.

What i'm trying to say is that at graduate level, with the bigger companies you apply and they will fit you in where there is a need for you, regardless of your experience.

If you really want a network job you need to look for a specific opening with that as the role to be undertaken, or look for a company that works mostly if not solely in networking. Otherwise you will be doing "general" computing jobs.

But to answer the question, I'm not aware of a specific company, all i can recommend is CISCO.

MrsTinks

Hate to rain on your parade... but many graduates are having issues finding jobs in their chosen fields. I'm very biased because I never went to uni (changed my mind last minute) and it's never stopped me... at 28 I accepted a job for £35k
Please do not lay out your plans based on getting a £xk job when you leave and saying "oh no worries"... hit the debts that you can NOW... your student debt as it were is as low cost a debt as you're likely to get so don't worry about that one for now - but any credit cards and overdrafts should be kept to an ABSOLUTE minimum... if you're earning £1000 per month - take home of what? £700? ish...

You should with your loans and grants be able to get through without needing to use an overdraft. Look at doing a SOA if you're not sure of what your finances are doing etc