Graduate mortgages typically refer to a select type of mortgage offered by a mortgage lender which is exclusive to graduates.
There aren’t a lot of graduate mortgages available and typically you may find that a standard mortgage may be a better option for you.
What are graduate mortgages?
Graduate mortgages are mortgages offered by mortgage lenders to recent graduates or to anyone who has ever graduated from university.
As you can see graduate mortgages may be more of a marketing term than an actual specialist product.
If you have a graduate job that starts in a few months you may find that most mortgage lenders will need to see that the job you are starting has a long term contract.
If you are newly self-employed then it is unlikely you will find a mortgage lender that will lend to you as most mortgage lenders will want to see your accounts for at least 12 months.
You should seek the help of a self-employed mortgage broker as they may be able to advise you on suitable products.
here are one or two mortgage lenders who offer exclusive graduate mortgages to graduates.
Graduate mortgages will usually:
- Offer perks and discounts
- Offer high loan to value rates
- Allow for parents or guarantors to be in some way involved
If you are looking for a graduate mortgage then you will likely fit these criteria:
- You have a huge student debt
- You have a little mortgage deposit
- You have a bad or okay credit score (you may be more suited to a bad credit mortgage and a bad credit mortgage broker may be able to assist you)
- You are on a graduate scheme
- You have just started your first job
- You have a job that starts in a few months
If you are looking for a graduate mortgage then a mortgage broker will be able to help you
find the right mortgage lender who can offer you a mortgage
It is not always the case that the bank you have your current or student account with will have the best mortgage offer for you, even if they offer a graduate mortgage and it is always worth searching the market or getting advice from a mortgage broker who may be able to advise you on the whole mortgage market.
Can you get a professional graduate mortgage?
Yes, mort mortgage lenders will prefer to lend to graduates who have a profession where there seems to be a career path and the possibility of income growth throughout the career path.
Professional mortgages could be for nurses, doctors, surgeons, lawyers etc
Can you get a mortgage with 0% LTV as a graduate?
Yes, there are mortgages which you can obtain with 0% as your mortgage deposit.
They are a certain type of mortgage known as a family springboard mortgage, they include mortgages from lenders such as the Barclays family springboard mortgage, the lloyds lend a hand mortgage or the post office family link mortgage.
Can a graduate student get a mortgage?
Yes, graduate students can get mortgages as long as you have a good mortgage deposit, some income and a steady job.
You may even be able to get help from one of the government’s home buyer schemes.
The home buyer schemes include:
- Lifetime ISA- gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
- Help to buy ISA- gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
- Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy- allows you to buy your home at a discount price.
- Preserved right to buy- same as above.
- Right to acquire- same as above.
Can you get a mortgage on a graduate scheme?
Yes, it is definitely possible to get a mortgage on a graduate scheme as long as the graduate scheme is a paid graduate scheme.Getting a mortgage can be a very difficult process if not handled with care.If you are considering getting a graduate mortgage then using a mortgage broker may be a good choice as mortgage brokers usually have access to many more products than any specific mortgage lender. Mortgage brokers will also usually have access to specific deals from mortgage lenders as well as experience on which mortgage lenders will be more likely to accept your case and provide you with a mortgage offer.
This will help you avoid getting rejected on a mortgage application and having to build credit due to the damage a rejection might do to your credit score.If you have bad credit or are self-employed then specialist mortgage brokers such as bad credit mortgage brokers or self-employed mortgage brokers may be useful.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.