The Graduate Mortgage

It isn’t all bad news for students.
Being a graduate isn’t quite what it used to be, some would say. The excitement and pride of gaining that all-important qualification has been tarnished slightly by the considerable weight of those deeply unpopular student loans. It’s not uncommon to hear of graduates leaving university with debts in excess of £20,000. It’s unsurprising then that many graduates think they have little chance of securing a mortgage until they’ve shed some of that initial debt.
The truth is actually very different.
Mortgage providers seem almost eager to lend to graduates. Graduates are seen as responsible, with good employment prospects and a potentially high earning power. Mortgage providers are so eager, it would seem, that many now offer a specific Graduate Mortgage.
Graduate mortgages are generally made available to those who have been in permanent employment for 12 months or more (and have passed any probationary period) and have graduated with a degree standard certificate from a U.K. university within the last seven years.
Graduate mortgages differ from traditional mortgages in a number of (very positive) ways. Typically, no deposit is required; the set up fees are remarkably low; the income multiples made available are above average (particularly if you have graduated into a recognised profession); and flexibility is very much the order of the day. Perhaps of most interest, however, is the fact that many lenders will offer up to 100% Loan to Value, with a parent or guardian acting as guarantor, securing a loan against their own assets for the percentage above the graduate’s earnings.
Of course, it goes without saying that the graduate must fulfil the very basic requirement of being able to afford the mortgage repayments, but, as you can see from the above, graduates are far from being perceived as ‘a bad risk’ and there are ample opportunities to step onto the property ladder.