PhD student + permanent wage-earner = Mortgage?

laurathree

Hi all,

I am 25 and trying to get on the property ladder with my partner, also 25. We currently live in Ealing, London, and are paying £875/ month in rent. I have been on a temporary contract for £16,000 p/a for the last year, and he is on £21,000 in a permanent contract.

I have just handed in my notice, as I will be starting a PhD in October. It is a Collaborative Doctoral Award from the Arts & Humanities Resaerch Council (AHRC), which means that although technically studying at Queen Mary University, I will actually be working full-time at the Geffrye Museum in East London. It pays £16,000 p/a, but as this is a studentship, it is tax free and I will have the take-home equivalent of a £20-21,000 p/a job for the next three years, and at the end of it I will be much better qualified for long-term curatorial roles - this was way too good a career opportunity to pass up!

Since 2008 I have been grappling with the lack of permanent contracts available, and this is the longest one I have ever had. My partner and I are both pretty thrifty, and have minimal outgoings beyond our rent. We have saved between us somewhere above £30,000 for a deposit, use credit cards but pay them off immediately (purely for big purchase/ holiday protection and to try and build our credit score) and have only ever had loans of the student variety. Neither of us have had a period of unemployment lasting longer than a month since graduating in 2008.

My question is, should I give up hope of being able to get a mortgage because I only have a 3-year contract? We could probably beef up our deposit in the next three years, but I would really rather get on the first rung of the property ladder.

Thanks all,

Laura

ACG

Your partners contract, you say permanent - do you mean in the sense of a normal type job? ie its not renewed every so often?

With yours, the 3 year contract shouldnt be an issue. Ive never had to look at how lenders would view a tax free wage before, so i cant answer that bit with any certainty but i would suspect they would probably be the cautious type and stick to the £16k.

If you mean your partner is in permanent employment then i would say your combined income (in lenders eyes) would be £37k, meaning you could probably borrow £150-166k maybe more.

laurathree

ACG wrote: »

Your partners contract, you say permanent - do you mean in the sense of a normal type job? ie its not renewed every so often?

That is correct - not renewed as far as I know (although I do not have the contract to hand).

ACG

In that case, i would stick by what im saying.

Did you have an idea in mind as to what you were looking for? It may well be you could get more, when i give figures i tend to be a little on the cautious side but it may be possible to get more.

If you said £300k then id be saying no chance, but if you said a purchase price (including your deposit) of say £200k then that might be possible.

laurathree

I would aim for between 150 and 200k, 200k being the absolute top we would want. London is a pain and a hard place to get on the ladder as it is of course, so I'm not putting a definitive number on it. 2 bed ideally, but I know that restricts us to very select areas of London.

laurathree

Also - is there anything I can do to strengthen my case? Does my employment record have any bearing on this?

Dave_Ham

I would suggest you sit with a broker to identify the best way forward, in a tad more detail.

The banks offering the market leading rates are unlikely to like your employment type, but there will be banks willing to lend at sensible rates.

All the best