Remortgage during PhD
Hi,
I currently have a fixed rate mortgage, all sorted etc.
The fix rate period will end in three years. But, if all goes to plan, at that point I will be on a PhD at a funding level of £13,500 a year and my partner will be doing a clinical doctorate in psychology at about £21,000 a year.
I have no issues about affording the monthly mortgage payments, that is fine and between two people are relatively cheap (a lot cheaper than renting!)
My questions are about remortgaging at the end of the fixed year period. We will have about £100,000 balance to remortgage. Her earnings are salaried so at 5 times that we get to over the balance, so it may be her earnings alone are enough to mortgage the balance. But has anyone got any experience here of getting a mortgage while on a PhD? Do any lenders count funding as "earnings" contributing to the balance that can be borrowed or is it always ignored?
I currently have a fixed rate mortgage, all sorted etc.
The fix rate period will end in three years. But, if all goes to plan, at that point I will be on a PhD at a funding level of £13,500 a year and my partner will be doing a clinical doctorate in psychology at about £21,000 a year.
I have no issues about affording the monthly mortgage payments, that is fine and between two people are relatively cheap (a lot cheaper than renting!)
My questions are about remortgaging at the end of the fixed year period. We will have about £100,000 balance to remortgage. Her earnings are salaried so at 5 times that we get to over the balance, so it may be her earnings alone are enough to mortgage the balance. But has anyone got any experience here of getting a mortgage while on a PhD? Do any lenders count funding as "earnings" contributing to the balance that can be borrowed or is it always ignored?
Hi Matt,
I am going through something similar myself, doing a PhD, and have a mortgage but I used to be a financial advisor. So generally speaking at the end of your 3yr fixed deal your mortgage would go onto the Standard Variable Rate of your lender. Usually they will get in touch before hand and offer new products, if you stick with the same bank/building society there is usually minimal paperwork and they won't even ask about your circumstances.
The problem that might arise (that I'm up against just now) is that if you wish to change lender or change property most will not accept PhD stipends as income.
Best,
Joe
I am going through something similar myself, doing a PhD, and have a mortgage but I used to be a financial advisor. So generally speaking at the end of your 3yr fixed deal your mortgage would go onto the Standard Variable Rate of your lender. Usually they will get in touch before hand and offer new products, if you stick with the same bank/building society there is usually minimal paperwork and they won't even ask about your circumstances.
The problem that might arise (that I'm up against just now) is that if you wish to change lender or change property most will not accept PhD stipends as income.
Best,
Joe
Original post by jlr84
Hi Matt,
I am going through something similar myself, doing a PhD, and have a mortgage but I used to be a financial advisor. So generally speaking at the end of your 3yr fixed deal your mortgage would go onto the Standard Variable Rate of your lender. Usually they will get in touch before hand and offer new products, if you stick with the same bank/building society there is usually minimal paperwork and they won't even ask about your circumstances.
The problem that might arise (that I'm up against just now) is that if you wish to change lender or change property most will not accept PhD stipends as income.
Best,
Joe
I am going through something similar myself, doing a PhD, and have a mortgage but I used to be a financial advisor. So generally speaking at the end of your 3yr fixed deal your mortgage would go onto the Standard Variable Rate of your lender. Usually they will get in touch before hand and offer new products, if you stick with the same bank/building society there is usually minimal paperwork and they won't even ask about your circumstances.
The problem that might arise (that I'm up against just now) is that if you wish to change lender or change property most will not accept PhD stipends as income.
Best,
Joe
That is great Joe, thank you for the reply. It fits in to what I expected. Staying on variable rate might work (hey, this EU mess might even work out for me if central rates stay low!) or just taking a new offer from my current lender would work too.
If we have to move lenders and rely on my partners earnings alone, that might make it more difficult.
Is it a case of no lenders accept PhD stipends at all? Heard of any that do?
Original post by MattRickard
That is great Joe, thank you for the reply. It fits in to what I expected. Staying on variable rate might work (hey, this EU mess might even work out for me if central rates stay low!) or just taking a new offer from my current lender would work too.
If we have to move lenders and rely on my partners earnings alone, that might make it more difficult.
Is it a case of no lenders accept PhD stipends at all? Heard of any that do?
If we have to move lenders and rely on my partners earnings alone, that might make it more difficult.
Is it a case of no lenders accept PhD stipends at all? Heard of any that do?
@jlr84 is right with this. Going to your current lender's SVR is probably not going to be financially crippling with rates as they currently are, and it avoids any awkward questions. Stipends will not count as income for remortgaging purposes, and you could be in a pickle if you draw attention to the change in your circumstances by trying to remortgage with another lender.
Thanks all for the feedback and advice.
It was pointed out that I could be counted as a "dependent" if we apply for a mortgage using my partner's earnings while I am still on the PhD. Does anyone have an explanation of what that means and what that might do?
It was pointed out that I could be counted as a "dependent" if we apply for a mortgage using my partner's earnings while I am still on the PhD. Does anyone have an explanation of what that means and what that might do?
Original post by MattRickard
Thanks all for the feedback and advice.
It was pointed out that I could be counted as a "dependent" if we apply for a mortgage using my partner's earnings while I am still on the PhD. Does anyone have an explanation of what that means and what that might do?
It was pointed out that I could be counted as a "dependent" if we apply for a mortgage using my partner's earnings while I am still on the PhD. Does anyone have an explanation of what that means and what that might do?
It would mean that your stipend income would be discounted, the mortgage would continue in joint names but only one person's income would be assessed (the affordability criteria would also take into account your status as 'dependent') - would your partner's income alone be enough to remortgage at the level you need to?
(edited 7 years ago)
Original post by Reality Check
It would mean that your stipend income would be discounted, the mortgage would continue in joint names but only one person's income would be assessed (the affordability criteria would also take into account your status as 'dependent'
- would your partner's income alone be enough to remortgage at the level you need to?
- would your partner's income alone be enough to remortgage at the level you need to?Against the outstanding balance? Yes, as 5 times her salary will just be enough to cover the balance. But I worry about me being a "dependent" and how that will be considered.
Original post by MattRickard
Against the outstanding balance? Yes, as 5 times her salary will just be enough to cover the balance. But I worry about me being a "dependent" and how that will be considered.
You will be considered a 'cost' on her income, and I very much doubt she will get 5 times her income. Assuming her income is counted at all, and as a student on a 'fixed term' of funding it probably won't be, then with your income counting for nothing, you'll be lucky to get 4 times I suspect.
I've been through similar and have kept very, very quiet about all education/health/employment changes. If you aren't on a conventional permanent employment contract, then mortgages are currently very hard to get or change at the moment.
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