How do student loans effect mortgage applications ???

Mattyp_2

Can anyone tell me if they know how my mortgage application could be effected by the student loan I have. I'm currently paying it back bit by bit every month via my employer using the PAYE system ?

mrluke

I think it varies from Bank to Bank .

Try it on the mortgage calculator provided on the banks websites , put it down as either expenditure or a loan.

I too pay a student loan , didn't seem to affect much as its only around 160 pounds .

Velvet_Glove

I'm pretty sure they are ignored by most lenders.

Mattyp_2

Yea I also think it shouldn't cause any bother and I have read on some other sites that doesn't effect your credit rating in any way. I just thought it would be interesting to see if anyone else has had experience with this.

Thank you mrluke and Velvet Glove, much appreciated !

GwylimT

Most lenders treat it like any other outgoing in your affordability assessment, just like an electricity bill.

Mattyp_2

I guess I'll only know for sure if I call them and ask. Like I say it shouldn't cause me any problems. Just interested to what experiences other people have had. :-)

kingstreet

At worst, the highest amount visible on your payslips will be deducted for affordability. At best it will be ignored.

It varies from lender to lender.

Mattyp_2

Thank you kingstreet. I will allow for what's on my payslips and if if they are not fussed about it, all the better !

kingstreet

If using lenders' online affordability calculators, add the monthly amount in the credit commitment section to ensure it won't tip you out of that lender's reckoning on affordability.

I've just tried one and a payment of £83 per month on a £20k salary reduced the borrowing power from £97,125 to £85,380 over 25 years.

That's a loss of almost £12k for a £1k pa commitment.

regprentice

Colleague of mine lost out on a property because he hadnt disclosed his student loan and , as implied above, it meant he lost out on a property he could previously thought he could 'just' afford.

this was with rbs/natwest

advice_please_2

I'm with nationwide and remortgaged as moved house and was at the end of paying mine

They take it as an outgoing and will need to look at last several pay slips

Mine got complicated as they took my latest payslip with a bonus payment and hence student loan in that month was higher and used that as my monthly outgoing!!