Student Mortgage

forumjump_2

Hi,
I'm a 18 year old student currently weighing up my possibilities for accommodation next year. One option that has been put on the table is joint buying a house with some friends.

We are looking at 4 bedroom houses valued between £100,000 and £140,000 brought by either 2 or 3 people.

Just got a few questions if I may. And your opinions are also much appreciated.

Would it actually be possible for me to take out a mortgage? I have an income of approximately £12,000 a year, never had to use my overdraft and in quite a nice financial state. The other 1/2 bedrooms will also be rented out, so that'll be another source of income. My guess is that I would need to borrow between £20,000 to £50,000 (depending on house value and percentage I would own).

Deposit I believe is about 10-15%. This is a figure we would be able to pay up front.

Is there anything else I'm missing?

Adam

holly_hobby

Ok, firstly buying with others whom you have no relationship (albeit friends), can be achieved (subject to status of course), but can be fraut with problems.

I'm not sure if you have any parental support, but if you do you may to take a look at a scheme that Bath B Society are marketing, specifically aimed at those in higher education with the support (joint apps, guarantor/property charge) of parents.

In buying this way (and if parents are guarantor instead of joint applicants), you are the owner, which means that you will qualify for full FTB SDLT of 250k upto March 2012, and there will be no CGT liability if the property is your main residence up until sale (other variations may also apply). If parents are included on the mortgage, only 125k sdlt relief applies, and they may be liable to cgt upon property disposal. (dependant on figs and allowances )

You may then consider rental of a room to fellow students (upto 3 additional persons pemitted, whom don't have to be students), in which case goes without saying, select your roomies with a fine tooth comb, and only those whom will treat the property & you with respect). You are permitted on the Gov Rent a Room scheme - to earn upto £4,250 pa free of income tax, with anything over this amount exposed to income tax liability via annual self assessment.

Here is a link for you to take a look at the basis scheme details, maybe you can have a chat with parents, and give the lender a call to discuss if your situation is suitable etc .. http://www.buyforuni.co.uk/buyforuni-mortgage.html

If this isn't suitable, come back and we will give you guidance on buying with friends etc, but if possible I would avoid this route !

Hope this helps

Holly

Doshwaster

I wouldn't go anywhere near buying a student house with friends. You are asking for no end of problems (financial, legal and personal).

Personally, I'd just find somewhere cheap to rent and then use the rest of your money on having a good time. That's what student days should be about - not worrying about mortgages or having to pat to fix the leaking roof or central heating boiler.