Student Mortgage without guarantor? £115000 deposit

trudikeir

I am looking to buy a flat (roughly £180,000) and sub-let a room to cover the mortgage costs while I am at university, however I can't seem to find ANYONE who will even consider to give me a mortgage. I have been told that mortgages like these used to be available, but have been stopped since the credit crunch.

once my current property sells I'll have a minimum deposit of £115000.

I have been told a mortgage can only be based on my income from work (£360 per month) and they cannot take my student loan or rental income (£800 per month) into account.

I am not in a position to have a guarantor, although I have excellent credit.

Is there another way to get any kind of loan based on the high deposit that I have?

I fully agree that I could quite easily buy a flat for £115000 and not have to worry about a mortgage, however I want to make an investment during my time at uni and essentially have a tenant pay off my mortgage, while living in a flat I could not otherwise afford.

Any advice would be much appreciated!!

holly_hobby

Any residential mortgage will generally be based on your earned income, and even with a guarantor your own income must be sufficient to service the loan - so a residential mge is out of the question for you at the moment.

Therefore the only thing I can think of would be a buy to let mortgage - where the lender bases affordability not on your earned income, but on the assumed rental income being 125% of mge repayments.

You are not a FTB so you would qualify, ltv would be about 75% max - the only fly in the ointment is that you know from outset that this will be your main property where you shall live - in which case your application for a BTL mortgage would be improper - unless of course your intention was to let it out, but following completion maybe your situation changed ...

Kingstreet mentioned on another thread that the Mortgage Works assess BTL affordability in this manner ...

Hope this helps

Holly

poppy10_2

trudikeir wrote: »

I want to make an investment during my time at uni and essentially have a tenant pay off my mortgage, while living in a flat I could not otherwise afford.

http://www.youtube.com/watch?v=XIX0ZDqDljA&t=1m41s

The banks are under no obligation to take on financial risk in order to fund your desire to get into speculative investment.

Daniel_gecko

Lost interest on £65,000 = ~£2,000 per year. More if you are a fluent investor.

Interest cost on a £115,000 mortgage. Chances are you will get hit by a rather high rate with this sort of risk, possibly even BTL rate territory = £5,000-£6,000.

Rental income = Over several thousand.
Personal gain from not having to pay rent = Quite a bit.

Overall I agree with your idea, you will probably be saving yourself a good few grand every year. Your rental income and not having to pay rent will cover the opportunity cost and the debt cost of this property.


However 2 reasons I would urge caution:
*If you fail to find tenants you could be in trouble. That's probably why the banks will be cautious with you.
*Your rental income should cover the mortgage cost, but any gain or loss in property value will hit your pocket. You might save a few grand in a year, but your property could easily lose 10% or 18k in a single year. In a few years time after Uni has passed you could have easily lost 30%.

You seem to have profited largely from the property price boom of the past decade. Just be careful, just because you made money that time doesn't mean property continues to be a good investment. 10-30% falls within the next 5 years are quite foreseeable. These are dangerous times for speculation/investment.

Good luck whatever you do.

PasturesNew

What sort of loony would pay £800 to share a flat with a student/owner? Is £800 reasonable?

WillowCat

I read the original post to mean £800 was the total of the OP's student loan AND the rental income.

trudikeir

£400 rent, £400 Student Loan x

somethingcorporate

What part of the country are you in where a room in a student let is £100pw?

I was on en-suite campus with all my meals cooked for that cost! (couple of years back now though!).

dimbo61

Heads up on the cost of student accomadation!
Manchester ensuite room £119 a week,
liverpool about £93-105 a week
London from £215-270 a WEEK FOR ENSUITE
Thats without a bite to eat

neverdespairgirl

somethingcorporate wrote: »

What part of the country are you in where a room in a student let is £100pw?

I was on en-suite campus with all my meals cooked for that cost! (couple of years back now though!).

In 1997 I was paying £110 a week for a very grotty halls room in Camden, in London, with an inedible breakfast and revolting "dinner" (at 6pm!) 5 days a week.

Probably a lot more, now.

rumdiddlyum

if it not new build accom for students your doomed i mean if you can get brand new for less who is going to turn that down