PhD student - can I get a mortage?

mynameisclare

Reactive wrote: »

...I'm getting TAX FREE £19,000/year GUARANTEED for three years (+ other earnings guarnteed)

It's no more guaranteed than a normal salary, ie not at all. It depends on your making satisfactory progress on your research.

abby1234519

Reactive wrote: »

Of all the people out there in the country, I thought I would have been a safe bet for the banks.

...I'm getting TAX FREE £19,000/year GUARANTEED for three years (+ other earnings guarnteed) AND I do not have to pay council tax etc because I'm a student.

....there is something seriously wrong with the world if I can't get a loan.

But they have to look at what happens at the end of the 3 years, I just spoke to a family friend who said yes that makes you look good for 3 years but theoretically the bank wants to see longevity for the life of the mortgage. Not that you would stay in that house for 30 years but its hypothetical.

He said if you had a PhD with a gauranteed job at the end then you'd be more desireable.

He then said try a broker you might have some luck!

celyn90

Reactive wrote: »

Of all the people out there in the country, I thought I would have been a safe bet for the banks.

...I'm getting TAX FREE £19,000/year GUARANTEED for three years (+ other earnings guarnteed) AND I do not have to pay council tax etc because I'm a student.

....there is something seriously wrong with the world if I can't get a loan.

I disagree. At the very best you could be treated as a contract worker for three years. If you have been in proper employment before you studied then you might be able to show a continued employment record that would continue with your studies and if you have a formal job promise (a real offer) on completion then you could probably make a case for afterwards. You need show either a good past history, a concrete future or both - you have to show you have the potential to service the loan for the length of the term; not just three years.

cardinalbiggles

mynameisclare wrote: »

It's no more guaranteed than a normal salary, ie not at all. It depends on your making satisfactory progress on your research.

And your not technically actually doing a PhD until after the first year as well. If things dont go well, and thats quite common for PhD students your incomeless.

Reactive

celyn90 wrote: »

I disagree. At the very best you could be treated as a contract worker for three years. If you have been in proper employment before you studied then you might be able to show a continued employment record that would continue with your studies and if you have a formal job promise (a real offer) on completion then you could probably make a case for afterwards. You need show either a good past history, a concrete future or both - you have to show you have the potential to service the loan for the length of the term; not just three years.[/QUOTE

I think everyone is missing my point. What I really mean is: is the average person's salary (i.e job) more secure than my PhD salary?

I just don't think it is.

As for previous work, I did an industrial year as part of my degree (for which I made around £30k) and I have some part-time work before I started my degree. Would this count?

I'm only 22 though, and that will probably be held against me.

celyn90

Reactive wrote: »

I think everyone is missing my point. What I really mean is: is the average person's salary (i.e job) more secure than my PhD salary?

I just don't think it is.

As for previous work, I did an industrial year as part of my degree (for which I made around £30k) and I have some part-time work before I started my degree. Would this count?

I'm only 22 though, and that will probably be held against me.

I would say your situation it is far less secure than a salaried position. What you earn is not an issue month to month, it's just not long term. You have no employment rights as a PhD student and the length of the tenure/funding is only three years in the best case - you are only showing you can service a tiny fraction of the time of the loan. You also potentially have no provision if you overrun your time or take longer to complete than the three years (not uncommon - in my lab, four years was "required" by my supervisor and he didn't pay you for the final one or give you writing time - and you weren't told this when you signed up). You have no monetary provision if you are sick or need to defer/suspend/extend, you'd find it hard to get insurance for loss of earnings/redundancy as you aren't technically employed.

Your position (and your funding) can be terminated without notice. Your first year is likely to be a probationary year too (as cardinalbiggles mentioned above) - so if you have three years funding nothing is actually secure until you've transferred fully onto the program one year in.

A contract worker would have the potential of further work beyond three years with the same employer, a PhD student has to find a job afterwards. This might be easy, it might not - but the role that you have when you apply for the loan cannot theoretically be extended so it's harder for you convince them of a solid future and this all equates to risk.

AndyGuil

rpc wrote: »

It depends!

I moved house twice as a postgrad (EngD). The first time (pre-crunch), they wanted 3 months bank statements and offered a smaller loan than I already had with them. Despite a secure job at the end of my degree, I was significantly worse off than someone in FT employment. They were still happy to lend, just not so much. I was only looking for about 30% LTV on the new mortgage, compared to 95% when I took out the first one so I should have been a very wanted customer.

Second time (post-crunch), same bank, they worked out what my equivalent gross salary would be and assessed us as if I was in FT employment with that salary. This gave a massively larger figure although we needed nothing like the maximum they would lend.

Neither time did it make any difference to the mortgage product, which was determined by things like LTV and current accounts, etc.

If you don't mind saying which bank did you get the mortgage with? I've been looking for a bank that uses the EngD salary properly.

rpc

AndyGuil wrote: »

If you don't mind saying which bank did you get the mortgage with? I've been looking for a bank that uses the EngD salary properly.

Lloyds TSB both times. I don't know if their policy changed or two different mortgage advisors had different opinions on how to apply it.

rpc

Reactive wrote: »

Of all the people out there in the country, I thought I would have been a safe bet for the banks.

...I'm getting TAX FREE £19,000/year GUARANTEED for three years (+ other earnings guarnteed) AND I do not have to pay council tax etc because I'm a student.

....there is something seriously wrong with the world if I can't get a loan.

Except it isn't guaranteed. Research funding can disappear pretty quickly and PhDs can become MPhils if your work isn't up to scratch etc, etc. It is much harder to get rid of a permanent employee than a student and the banks might like that extra security for their money. While some postgrads have contractually agreed funding, many do not and are funded annually from research budgets.

Most of the replies here have been positive - why not go and speak to a few banks rather than putting yourself on a pedestal?

Kara_P

Hey. I got my mortgage 5 months back and I am doing a PhD. It was joint with my boyfriend but Loyds had no problem accepting my income.

In relation to the other points... Normally a PhD is fully paid and secured for the full term and specificaly for one, named person. Therefore as long as the student works hard there isn't a big possibility that they will loose there PhD. After the first year it is very difficult to get rid of a PhD student (normally the PI will loose funding from that particular body for a number of years). Now a days PhD stipends are higher than normal graduate jobs (basic £12,000 tax free up to £21,000 tax free for non-clinicians). I understand that after 3 years there is no gaurantee of a job but my position as a PhD student is far more secure than my boyfriends and many others. I personally think it is unfair that banks don't not count our incomes like other jobs but then they must know what they are doing.... right...?

Good luck with getting a mortgage and the PhD!