Student buying a house.

Hello there,

I am new to this forum so please bare with me as I try to explain my situation. Any help I receive will be very much appreciated.

I am a single child and live with my parents and will be graduating from Uni in 2012.

The house next door has gone on sale and I have always been waiting for this opportunity as I want to move out after marriage but live close to my parents as they are elderly.

My parents are disabled and receive benefits so there is no income in the house apart from that.
My parents current home is worth around 90k and has about £30,000 left on mortgage for 17 years more.

My question is: Can i buy this house as a student? If we can pay the 20% advance, will the bank give us a loan even if i havent finished my studies yet, and do not have a job? Can I convince the bank that I will maintain the payments (student loan, part time job etc)

My parents are willing to put their current house as security for the new house for me. so the bank can be rest assured? But I am worried that the new house may become an Asset on their name, which will result in effecting their benefits.

Please help as the landlord next door may sell the property if we delay.

Many Thanks in advance, any questions I will be willing to answer.

Reply 1

Computerised

Lolololol bankers can't trust students with an overdraft let alone a mortgage.

Reply 2

SolitaryRomeo

Original post by Computerised

Lolololol bankers can't trust students with an overdraft let alone a mortgage.

lol, yes but nothing secures an overdraft. Here there is a current property that is available for security, IF they consider it?

Reply 3

Igor00

Original post by SolitaryRomeo

lol, yes but nothing secures an overdraft. Here there is a current property that is available for security, IF they consider it?

What if the worst happens and you're unable to keep up the payments, resulting in your parents current property facing repossession?

Reply 4

SolitaryRomeo

Original post by Igor00

What if the worst happens and you're unable to keep up the payments, resulting in your parents current property facing repossession?

With a monthly payment on loan for £200 it shouldn't be difficult. And when i graduate i will have a job. Until then, I might even be able to rent the second spare room out to lodgers?

Reply 5

KJane

I swear banks don't consider student loans as income. It seems like a big risk with putting your parents house up for it and what if something happens and you can't keep up with repayments, what if you have difficulty in getting a job once you graduate? Why does it have to be this house? Why not look for one in the surrounding few streets when you're in a better financial situation at a later date?

(edited 12 years ago)

Reply 6

GR3YFOXXX

You need to show a steady income into your account, a student loan wont cut it. Do you have a girlfriend who works? if so she may co-sign. You need to show that your income > 5 times the value of the mortgage you need.

Reply 7

Shani

Mortgages are usually worked out on a 2.5 x your yearly income. As you have pretty much 0 income it is unlikely the banks will give you a mortgage. You will need to get in touch with various banks/mortgage lenders re: the securing the debt on your parents house - it's by far not a simple process and I believe you will have a very hard time trying to buy this house without evidence of a steady stream of income.

How did you work out that you will only be paying £200 a month? Will you only need £25-30k mortgage over 30 years???

Reply 8

SolitaryRomeo

I have consulted a very experienced mortgage broker, for a £70,000 property, I only need to put down 25% deposit and mortgage is guaranteed.

Just a note, I know it is difficult for students to purchase a house, but there may be ways out there. You wont know until you try.

Reply 9

Quady

Original post by SolitaryRomeo

I'm sure you can find a way to buy it.

But I'd be very sure about your means to pay for it, if interest rates go to 4% within three years, or mortgage rates rise more than rises in the base rate will you be ok?

Having your parents place as collateral for the mortgage means the bank will take their house too if need be. I wouldn't want that as even a remote, let alone quite plausable possibility.

Reply 10

HJV

Wait, you're planning to take a loan and pay that off with another loan? Doesn't sound like a great idea to me. If property values drop and/or interests rise you're absolutely ****ed.