Mortgage possibility for graduates?

Dave2_2

My wife and I are looking at getting a mortgage and getting on the property ladder, but I just wanted to check before we begin the process of finding a mortgage adviser (whole of market, no fee - I've been reading for a while!) that we're likely to be able to get something. We have some circumstances which are a bit different to the norm!

We've just graduated in the last week, and I have now been working for two weeks with a local council as a Graduate Trainee Accountant (salary £21.5k). My wife is about to begin a job working in London for a government agency running a clinical trial, earning £23k.

We owe almost £30k of student debt between us as we both did four year courses and come from low-income families, but we don't have to start paying it back until next April.

One of the tricky bits is that I have a six month probationary period, which is standard for where I work. The organisation my wife is working for is initally giving her a year's contract, because they start all new employees on that, although it is very likely it will be extended into a permenant contract.

We can put a deposit down of £20k, and are looking to purchase a house in Essex costing around £180k, so the mortgage would be for £160k. I've prepared a detailed budget and know that we can afford this with a fair amount of breathing space for interest rate changes (although we will want a fixed rate initially).

Would any of the experts like to comment on whether we should be able to get a mortgage, or whether we'll need to wait a year until probationary periods etc. are complete?

Thanks for your help, in advance!

Charlton_Taz

When both my other half and I graduated a few years ago, nationwide gave us a mortgage despite the fact we both had probationary periods. Indeed I was also training to be an accountant and we actually moved into the house a week before I started my job!! They essentially got details of salary and the probation period by writing to our employers. However, we were borrowing a lot less than you so it is only that which might...and I only say might.. be a problem I would have thought. In our situation we could have paid the mortgage with only one of our salaries, so if one of us had lost our job it wouldn't have been a problem....I'm not sure whether that would be the case with you...so that possibly could worry your lender. However....you should definately ask!!!!

Dave2_2

I was wondering if anyone else had any opinions on this?

Cheers,
Dave

MortgageMamma

Hi Dave

As an expert I'd say you are looking at a realistic borrowing amount but please don't borrow more than that as I think you would have affordability issues. The fact you have just started your jobs and are on a years contract and probationary periods is not an issue - there are quite a few lenders who will look at this, but which lender is used is heavily dependant upon your income vs borrowing amount (known as an income multiple or affordability) how much you want to borrow in relation to your purchase price (known as loan to value) and your individual credit reports, so if you have missed any payments or made late payments, got defaults, ccjs or been the subject of an IVA or bancruptcy that will influence the situation. Another thing that needs taking into consideration is whether you worked or not whilst you were studying. Some lenders like to see at least 12 months continous employment before they will lend.

This is the sort of information us brokers come in handy for. I think in the right hands you will be fine. Have you started looking for property yet?

Dave2_2

Thanks MortgageMamma. My wife and I both undertook a year's work as part of our degree so both have a year of continuous employment under our belts. I have also completed a detailed budget and am certain we can afford repayments on a mortgage this size, although obviously we wouldn't want to have one for much more than this in case one of us did lose our job. Both of our credit reports are absolutely fine so this shouldn't be an issue at all. What sort of loan-to-value ratios do the majority of lenders like?

We have started looking at property, although thus far only on the internet. We're hoping to start looking in earnest as soon as my wife has her contract through and we can get an Agreement in Principle to show we're serious.