Graduate mortgages

samumba

Hi - i'm a first-time buyer and fairly clueless about mortgages though I have read the free Mortgage guide on this site (v good - thank you!)

My question is whether anyone has experiences / recommendations / views regarding graduate mortgages.

Property prices i'm looking at are £180,000 - £225,000 (the minimum in my area) and i've probably got a 5-10% deposit.

Any guidance on where to start or if i'm even going to be able to get a mortgage would be greatly appreciated. I believe you can get graduate prices for 100% of the property purchase price? Does this mean I could borrow the full £225,000 ? In which case, what monthly repayments would I be looking at? Probably going to go with fixed rate so I can budget, and would ideally like it to be a repayment mortgage.

Many thanks in advance for your help!

neas

Graduate mortgages? What would be special about them?

I haven't heard of these? Aren't 50% of the young population supposed to be 'graduates'?

What did you graduate in? Or are you an undergrad?

Ball Park figures.. on a 5.5% mortgage borrowing 100k I'd pay back 600 a month on a repayment mortgage or so.

Guess it be alot.

Just wondering what these magic graduate mortgages would be... what makes them special etc too :P.. (I dont think they are any better than a normal mortgage but hey hum).

samumba

Hi, my understanding is as follows:

" Graduate mortgages are a relatively new product; they are based on the potential earnings of graduates and provide financial assistance for graduate borrowers looking to buy their first property.

They are typified by a low set up fee, good income multiples and flexible features - graduate mortgages provide a path to the property market for graduates who are unable to raise sufficient funds on their current salary.

One distinctive feature of the graduate mortgage is a high loan to value (LTV) attached to the product. Mortgage lenders are willing to lend 100% of the property’s purchase price and more often than not, most graduate products come with an extra 2% added to the loan. This additional 2% enables graduate borrowers to settle into life on the property ladder and pay for any further fees that may arise during purchasing, such as stamp duty and legal fees. Some mortgage lenders even provide up to 125% LTV but this involves introducing a guarantor on to the mortgage. Furthermore, interest rates are often capped for the first year of the graduate mortgage allowing borrowers to become accustomed to paying fees on a regular basis.

To be accepted for a graduate mortgage, applicants must be first time buyers over the age of 21, educated to degree standard from a recognised UK university within the last 7 years and able to provide a degree certificate to prove this. Applicants must have been employed for a minimum of 12 months with any probation period passed."

Gailk

Not sure if its what you're looking for, but I know Scottish Widows used to do them.

Gailk

just doing a quick google - HSBC do them too.

LillyJ

neas wrote: »

Graduate mortgages? What would be special about them?

I haven't heard of these? Aren't 50% of the young population supposed to be 'graduates'?

What did you graduate in? Or are you an undergrad?

Ball Park figures.. on a 5.5% mortgage borrowing 100k I'd pay back 600 a month on a repayment mortgage or so.

Guess it be alot.

Just wondering what these magic graduate mortgages would be... what makes them special etc too :P.. (I dont think they are any better than a normal mortgage but hey hum).

Scottish Widows specialise graduate mortgages, they offer you more based on the fact that your earnings rise fairly significantly in the first few years eg lawyers, doctors, architects.
In fact they were pretty competitive when we looked but ended up not getting one - it was a close call though and it does give you more choice.

neas

So they let you borrow more... but at a similar mortgage rate?

I was just wondering if You got a bonus rate or something. I wouldn't be going for one of these as they would lead to a whole hum of negative equity (no buffer vs equity loss).

LillyJ

You don't have to take the high LTV, the scottish widows 90% had pretty good rates when we were looking.