The internet is full of terrible advice for graduates looking to get on the property ladder. The first misconception to clear up is that there aren’t specific mortgages just for graduates. While banks might offer specialist products such as interest-free overdrafts for graduates, there is no such thing as a graduate mortgage. That said, graduates are more than welcome to apply for a regular mortgage.
In most cases, when individuals search for a graduate mortgage, they aren’t looking for preferential treatment. They are looking for companies that will accept them, despite many of the following factors.
- Small deposit
- Poor or no credit history
- Student loans and overdraft
- Entry level job income
- A job that has yet to start
In the right circumstances, none of the issues listed above with be a problem. All you need to do is approach the right lenders and they will be able to help you buy your first home.
The issue many people face is that they head straight to their own bank, assuming that their banking history will make them a more attractive choice for the lender.
The big high street banks like HSBC and Natwest might not be your best option, so it’s wise to not limit yourself to the most obvious choices.
Other lenders might be far more willing to lend to graduates as they see them as safe and stable borrowers. In this instance, they may also offer enhanced rates and lower fees, lower deposit options and even bigger loan sizes through the use of a guarantor.
Professional graduate mortgages
There are certain professions that are more attractive to lenders. If you have trained in a specific field such as law or medicine, lenders might consider you to be a more financially stable borrower. This is in contrast to someone with more general training, such as a humanities degree.
Lenders may even look at projected future earnings and decide they are willing to let you borrow more than 4.5x your annual salary. This can be a huge help when you are just starting out with your career.
Looking for a mortgage before you start working?
In many cases, this won’t be a problem for some lenders. Provided you can give them a contract which shows you are due to start a full-time permanent position, they will be willing to go ahead with your mortgage application.
Self-employed after graduation?
If you have graduated and gone straight into self-employment, you may be disheartened by the prospect that most lenders will want to see three-years worth of accounts. The good news is that not all lenders will request this. In some cases, lenders may only ask to see one year of accounts, so you won’t have to wait as long before making your application. If you are taking over a business, you may be able to show the past accounts for that business as evidence of projected earnings.
How do I start the process?
If you’re ready to kick start your graduate mortgage application, get in touch with our team today by submitting an enquiry. We have access to the mortgage lenders that are more likely to accept your application, so you can save time and money by starting your search with us.