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Can I use my student loan as a deposit on a house?

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madypenny
madypenny Posts: 4 Newbie
in House buying, renting & selling
Im planning to go to uni at the end of the year.
I have been reading all sorts about how repaying your student loan but nothing about if it is a good idea or not to save my student loan and use it as a deposit on a property.

The advantage would be a secured accomodation and rental income along with the fact that if I make a profit out of it it could pay my loan off. And if it doesn't I could still rent it out as it is a very sought after area.
I will be doing all this with my parents meaning that the mortgage will be paid by them but I will be looking after the property.

Could this work?:D

Thanks a lot
«1

Comments

  • pinkkaz
    pinkkaz Posts: 538 Forumite
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    So your parents will have to apply for the mortgage, not you, so you give your student loan to them?

    What are you going to live on?
  • madypenny
    madypenny Posts: 4 Newbie
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    yes
    I will need two different loans: one for paying the uni fees and one for living expenses.

    So i will use the first one for a deposit and the second one to live on.

    I also have about £3k savings which might help...
  • beautifulgorgeous_2
    beautifulgorgeous_2 Posts: 802 Forumite
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    Who is going to pay your fees
  • dmg24
    dmg24 Posts: 33,925 Forumite
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    You do not receive the full amount of the maintenance loan at the beginning of the academic year, payments are staggered through the year.

    How much are the properties that you are looking at?
    Gone ... or have I?
  • madypenny
    madypenny Posts: 4 Newbie
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    about £180 for a 2bed flat/maisonnette or 3 bedrooms a bit further away
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
    Name Dropper Photogenic First Anniversary First Post
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    And when you finish Uni and it's worth £120k, you'll be stuck with it for years
  • brit1234
    brit1234 Posts: 5,385 Forumite
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    This post is so scary and wrong for so many reasons. The phrase a fool with his money comes to mind.
    :exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
  • Nicifer_noonoo
    Nicifer_noonoo Posts: 545 Forumite
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    The two loans you need to apply for are the Tuition Fees loan and the Maintenence Loan. You won't see any of the Tuition Fees loan as this is paid straight to your place of study to stop people applying for the loan and using it for something else as you're planning to. The maintenence loan is staggered into three or four payments depending on your course, and is not much anyway, heh.
  • madypenny
    madypenny Posts: 4 Newbie
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    brit1234 wrote: »
    This post is so scary and wrong for so many reasons. The phrase a fool with his money comes to mind.
    explain why...
  • Catblue
    Catblue Posts: 872 Forumite
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    So, you want to use your student loan to pay for a deposit on a house?

    Your parents want to use a different loan (mortgage) to buy the house. Let's say they take out a mortgage of £160K for this £180K flat.

    Presumably they wish to use rental payments to repay this mortgage. Now, if you get a 2-bed flat, then you'll be living there (presumably rent-free because you have used up all your student loan and all your savings with the deposit for the flat), therefore the person sharing with you would need to pay around £1000 per month for a room in the flat. This is the only way that your parents could make the repayments on the mortgage at current interest rates. If rates go up, this student would need to pay a lot more than £1K a month for a room in a shared house.

    And that's without taking the fees associated with mortgage arrangements, buying the house and maintenance expenses into account.

    Why don't your parents just loan you the money for university? You'd seriously be saving them money. It would work out cheaper for them, it would be less hassle for both of you, and the financial risk is a lot less. :confused:
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