Last updated: 23/07/2020 | Estimated Reading Time: 3 minutes
Mortgages for graduates
There are lots of reasons why graduates might be considered poor candidates by mortgage lenders – lack of capital for a deposit, large existing student debt and potentially poor credit history to name a few.
But this shouldn’t worry you, there are providers out there who specialise in offering mortgages to graduates, often attaching special benefits and allowances designed specifically to suit those who have recently left university.
In This Guide:
- Mortgages with benefits for graduates
- Professional or vocational graduates
- Applying for a mortgage before graduating
Mortgages with benefits for graduates
If you’ve just left university then the chances are that you’re somewhat short on cash, in a lot of debt, and potentially overwhelmed with the stress involved in moving out and starting a career.
Luckily, some mortgage providers who are aware of all of this are offering loans designed to suit recent graduates. These mortgages might come with free perks and discounts and are available with loan-to-value ratios of up to 95%, meaning that very little up front deposit is required.
You’ll need to hunt around to find these mortgage deals as many conventional mortgage providers will steer clear of recent graduates, who they see as very risky investments, but they do exist and they can be found.
Professional or vocational graduates
Those who have graduated in professional or vocational courses like law or medicine will find it easier to get a mortgage given the higher probability of them finding employment soon after leaving university.
A law graduate who has a job at a firm secured on graduation will be able to benefit from better interest rates and higher loan sizes than, say, an unemployed literature graduate.
This is because, fairly simply, graduates with more or less guaranteed employment are seen as a much safer bet on the part of the mortgage provider.
Whatever your course though, and however recently you graduated, if you shop around and compare mortgages online, you’ll be able to find a plan that suits your needs.
Use Money Expert’s online mortgage comparison tool to see what kind of representative rates you could be getting. It’s quick, free and easy to use, so compare mortgages now and see how much you can afford to borrow so that you can move into your new house right away.
Applying for a mortgage before graduating
If you haven’t yet graduated, but do have a job lined up for when you do, then you shouldn’t have trouble finding a mortgage provider who’ll lend to you.
So long as you have a contract written out and signed by the time you choose to apply for your mortgage, you should be absolutely fine.
Nowadays, many graduates go on to be self-employed immediately after finishing university either as a stop-gap before other employment or as a long term business plan. Again, this shouldn’t be a problem when applying for mortgages, but most lenders will require a few years of self-employment with consistent earnings before they agree to lend to you.
As always, if you find yourself in this position, it’s important to scour the market as the chances are that you’ll be able to find a mortgage provider with less stringent requirements than most.