Mortgage vs Student Loan

justtryingtogetby

Hi,

I was wondering if anyone knew whether student loans affect mortgage applications. I am thinking of applying for a mortgage with my partner in the near future and have around a 20% deposit saved for the types of house we are looking for. However, I am self employed, and have had my company for 3 1/2 years. As a back up to my company, I want to get a degree through open university which costs £15000. I just want to know whether that loan will affect my mortgage application?

Many Thanks

spadoosh

If your going through the student loand company it will have little affect on your mortgage (or as best i can tell, never had my student loans mentioned when getting mortgage)

If your getting a personal loan and using it for the course then yes it will considered in your mortgage application.

harvey115

You should try the 'How much can I Borrow' calculators on lender websites i.e. Halifax, HSBC etc inserting your loan repayments etc into it. That should give you an idea how much you can borrow.

justtryingtogetby

It would be through the student loan company. Thanks.

jonas123

it shouldn't affect your application normally if you pay taxes through PAYE as it will be taken into account in your net salary. Not sure how this works if you are self employed, but I suspect when you declare your earnings, you give the net amount your receive each month.

If you're not earning, then you don't pay it back so not a problem!

Lizling

It does affect the affordability calculations. Certainly every broker or advisor I've spoken to has asked how much the repayments are and used them in the calculations.

I ended up clearing mine before applying.

aleenajoe

I don't think it will affect your normal expenses but slightly ..

Wutang_2

aleenajoe wrote: »

I don't think it will affect your normal expenses but slightly ..

So it will?

Lokolo

You won't start repaying the loan until you've been to uni and dropped out or graduated, so it won't effect your affordability until then.

MiniSis

I was asked in my application and I just told the broker that it came straight out of my wages each month. Wasn't mentioned again and my application was fast tracked with no statements/payslips needed.

My loan is about £24,000, if it's taken its ever Taken into account I
Stuffed!!

jonas123

When you tell them your salary / show them payslips, they look at your net wage (i.e. after tax and student loan payments are taken off). So yes, your student loan is effectively taken into account as they assess affordability on your net salary position.

What I'm not sure about is how self employed people repay their student loan. In either case, it'll be a monthly value coming out of your account, and that will normally be taken into account when assessing affordability.