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Can a Student Get a Mortgage in Manchester?

University life is a phase of newfound freedom and growth, but it is also an introduction to financial responsibilities. Alongside tuition and housing costs, there is the natural aspect of fulfilling personal, social needs.

With respect to student accommodation, you could be fortunate and have a responsive landlord who tends to all maintenance issues promptly. Regrettably, the more common experience involves unresponsive landlords, taking weeks to resolve issues like a malfunctioning washing machine.

In such a scenario, your rent seems to be draining finances with no return. An alternative? Becoming your own landlord through obtaining a student mortgage on your place of residence. This path is not just about saving money; it’s a potentially profitable long-term investment.

Why should I get a student mortgage?

A student mortgage is an effective way to decrease housing expenses while providing a head start on the property ownership journey. View it as an investment strategy, especially useful for students in their later years of study or contemplating postgraduate study.

Even if you plan on moving after graduation, the property could be sold, using those funds towards your next home. The equity accumulated over the years in the existing property could be reused as a deposit for a second home or even fund vacations or a vehicle purchase. Thus, a student mortgage offers both immediate as well as long-term benefits.

How can a student get a mortgage?

Securing a student mortgage might not be an easy task, but it’s indeed not impossible. In our experience as a mortgage broker in Manchester, students looking for mortgages have some finances, perhaps savings, a Lifetime ISA or gifted deposits, for the initial down payment. If you are unable to make this down payment, the process may not proceed further. Borrowing for this payment would mean juggling payments for the loan, the mortgage, and course costs.

Qualifying for a mortgage as a student generally requires a source of employment. Full-time employment is ideal, but part-time work can also suffice.

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How to Make Yourself Reliable

Effective strategies to establish your reliability for mortgage lenders might include a larger deposit to reduce monthly payments or tapping into a government programme like the “Own Your Home” scheme. Look for plans that assist with larger initial investments or a share in the ownership to lower monthly mortgage payments. An Agreement in Principle (AIP) could solidify your case early on by showing you have pre-approval from a lender based on income proof and a good credit history.

What type of property can I buy with a student mortgage?

Mortgages often come with specific prerequisites, and student mortgages are no exceptions. A major condition for attaining a student mortgage is the requirement to sublet the remaining rooms in the house. The rent collected from these tenants can help cover monthly mortgage payments.

What happens if I can’t afford my payments?

Lenders are aware of the risks associated with lending to students. In the event of being unable to make mortgage payments, the onus falls on the guarantor – someone declared during the application process to step in and handle payments if necessary. Guarantors are usually required to meet specific criteria.

As mortgage brokers, we understand that lenders take the necessary precautions for any mortgage applicant, always preparing for the worst-case scenario.

For assistance in applying for a student mortgage or seeking advice for first time buyers in Manchester, get in touch with us. We can help ascertain if you qualify for a student mortgage. We look forward to hearing from you soon.

Date Last Edited: February 13, 2024

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