Can a student get a mortgage?

pandamoanium

Perhaps I'm looking too far ahead, but I admit it, this has been bothering me for a while..

Whilst I have the utmost of sympathy for those who are caught in negative equity and are faced with hefty mortgages, I must admit a part of me is glad to see house prices dropping in the hope that I'll be able to afford one in the not too disant future myself.

I've been saving for a while now and I have around 40k saved thus far. If house prices keep dropping the way they are I'm fairly confident that I could afford a house in say 2/3 years time, especially if I rented out rooms which I wouldn't mind doing at all.

The only thing is, is it actually possible for a student to get a mortgage? In 2/3 years down the line I'll still be in college, so I won't be in regular employment, however I'm pretty confident that I could save E800 per month to put towards a mortgage.

Also, I'm an only child and my parents own two houses - one has a mortgage, and the other is fully paid off. Would this have any bearing on me getting a mortgage the fact that I could use my parents and their assets to go as like, a guarantor with me on the mortgage?

So to sum it up; I have 40k already in savings, and I'm pretty confident of being able to save 800 per month while I'm in college, and I could possibly use my parents as guarantors - do I have any hope at all of getting a mortgage whilst I'm still a student in college or would I be laughed out of the bank?

I'm just afraid that once I'm finished college and actually in a job that I'll have missed the boat of rock bottom house prices and they'll be on the way up again once I'm in proper employment and in more of a position to get a mortgage.

asdasd

I presume you have some sort of income whilst in college?
If so, I think you could get a mortgage ( and I am amazed that you have saved 40K to be honest). With your parents as guarantor it would not have been a problem during the boom. I think you are a safe bet now even, given your ability to save, so it could well work for you.

Also they used to use resettable interest only loans for people like you, i.e. you have cheap repayments for a year or two which reset after a while to normal non-interest loans when you graduate and you income increases.

So I suppose you seem like a good candidate absent a credit crunch.

pandamoanium

Thanks for the vote of confidence Asdasd

Tbh I haven't a clue about mortgages (Yes, I hold my hand up, I don't know what a tracker mortgage is)

I just know that I have the ability to save and I don't mind doing a bit of scrimping and saving and missing the odd night out if it means I can get a foot on the property ladder early.

Yeah, I'll have income whilst I'm in college and I reckon I could easily save E200 per week. When I do the sums up in my head, with my 40k (hopefully by the time house prices bottom out I'll have another 10k or so to add to that) and the fact that I wouldn't mind renting out rooms for awhile etc.. I think I could afford it, it's just trying to convince a bank that a student can afford a mortgage is where I think I'll fall flat on my face.

I know my parents houses won't be worth as much a few years down the line, but I'd be looking at a "starter home" so I'm hopeful that the banks would know the the sale of just one of their houses, if it ever came to it to recoup the costs on my home should definitely more than cover it.

Thanks again for the info.

punchestown

pandamoanium wrote: »

Also, I'm an only child and my parents own two houses - one has a mortgage, and the other is fully paid off. (

Problem solved! You are looking for a home and your parents have a spare one. Its a no brainer!

SimpleSam06

pandamoanium wrote: »

I'm just afraid that once I'm finished college and actually in a job that I'll have missed the boat of rock bottom house prices and they'll be on the way up again once I'm in proper employment and in more of a position to get a mortgage.

I wouldn't lose any sleep over it. The days of rampant capital appreciation are gone for good in this country.

pandamoanium

punchestown wrote: »

Problem solved! You are looking for a home and your parents have a spare one. Its a no brainer!

Well that's worse case scenario for me, I want to get by on my own merit and leave whatever assets my parents have for themselves in their retirement later on down the line.

SimpleSam06 wrote: »

I wouldn't lose any sleep over it. The days of rampant capital appreciation are gone for good in this country.

True, it does seem to be going this way, I can't help but think though there is a chance of house prices "over-correcting" themselves and I wouldn't mind a chance to get on the property ladder when this happens before they slowly creep up again.

I guess the main query I have is it actually feasible for a student to get a mortgage provided they can make the repayments, or is it set in stone somewhere that you have to be in full time employment earning X amount?

SimpleSam06

pandamoanium wrote: »

True, it does seem to be going this way, I can't help but think though there is a chance of house prices "over-correcting" themselves

Without a doubt it will happen, probably more than once on the way to the bottom. This is called a "dead cat bounce", and will probably be the cause of many a wasted bottle of champagne amongst the overextended.

pandamoanium wrote: »

and I wouldn't mind a chance to get on the property ladder when this happens before they slowly creep up again.

To be honest I think you'd be better off not trying to get a "starter home", which is real estate agent speak for unsaleable properties that you need to get out of quickly. Forget the ladder, just focus on buying a house which you can live in for a long period, someplace you can call an actual home. A corollary to the idea that rampant capital appreciation is gone with the wind is that you'll find it very difficult to shift your starter home in a way that wouldn't have saved you more money had you just put your savings in a high interest bank account, factoring in inflation, carraige and sales fees, first time buyer advantages, and stamp duty plus taxes.

Victor

The first thing a bank will ask is can you repay the loan and the most pertinent factor for them will be whether you can sustain monthly repayments of X over an extended period?