what do lenders think about student loans?

Feanor

Hi,

Went to see mortgage advisor last night and when we told him about student loand he did a bit of a 'ummmm' kind of thing. I have 15k on one, pay £11 a month, my partner has 11k but pays £127 a month as hes on the old system.

Anyway i got an answer phone msg from him saying 'ive had a look at a few lenders who might consider your student loans, and i'll get back to you tomorrow'.

I thought student loans weren;t really such a big deal to lenders? Our mortgage guy didn't even know they came out of our wage automatically, he thought we could change the payments to whatever we wanted each month!

This is concerning me, does anyone know anything official as to what lenders think about student loans?

Thanks

luckyfool

Feanor wrote: »

Hi,

Went to see mortgage advisor last night and when we told him about student loand he did a bit of a 'ummmm' kind of thing. I have 15k on one, pay £11 a month, my partner has 11k but pays £127 a month as hes on the old system.

Anyway i got an answer phone msg from him saying 'ive had a look at a few lenders who might consider your student loans, and i'll get back to you tomorrow'.

I thought student loans weren;t really such a big deal to lenders? Our mortgage guy didn't even know they came out of our wage automatically, he thought we could change the payments to whatever we wanted each month!

This is concerning me, does anyone know anything official as to what lenders think about student loans?

Thanks

If you declare the student loans then depending on the lender, they will generally annualise your monthly payments and deduct them from your income before applying any income multiples. They would be treated in exactly the same way as any other form of credit.

Leon_W

I'll do the mortgage adviser ummmmmmmm then ! LOL

Student loans do not appear on a credit report so lenders can't see them. Student loans do not have to be repaid (income dependant). Read into that what you like, but I get the impression from speaking to many lenders off the record that they are not really that interested.

MortgageMamma

Sounds to me like your broker is just plain inexperienced. You can't have been at this job long to not know how student loans workBest of luck :)MM

bluep

Our lender wasn't interested as if your income drops below a certain point, you defer the loan. My partner was below the deferment level so had no commitment to a monthly repayment and I was on a high enough grad salary that repaying and meeting the monthly mortgage was easily within their salary multiple calculations. I got the impression that they were far more interested in any other type of loans and/or credit card debt.

regularsaver1

Below £15k you don't pay at present

bluep

If your gross salary is less than £1800 per month (might have increased) then you can apply to defer.

regularsaver1

defo not for my year - it is £15k gross a year, and was £10k

luckyfool

The different schemes floating about can be a bit confusing. The old style "mortgage" accounts can be deferred on a year by year basis if your income is below the threshold of £21,600. As soon as you are over the threshold you start making full monthly repayments by direct debit.

On the newer schemes it is collected through PAYE at source if you are earning over £15,000 and the amount deducted is a percentage of your income over £15,000.