Mortgage Broker covering West Wales

University Graduate Mortgages in 2024

Introduction

Congratulations, university graduate! You’ve tossed your cap in the air, celebrated your achievements, and now you’re ready to take on the next big milestone: buying your first home. But wait, how does one go from textbooks to title deeds? Fear not! In this guide, we’ll explore the ins and outs of homeownership for recent grads.

However, you may also face some challenges and uncertainties when it comes to getting a mortgage as a university graduate. Finding mortgage lenders accepting graduate employment contracts. Maybe, you are searching for graduate mortgage schemes with low deposits. Have little or no credit history, a high student debt, or a low income. You may also have limited savings or a small deposit. These factors can make it harder for you to qualify for a mortgage or get the best deal. 😕

But don’t worry, there are ways to overcome these obstacles and secure a mortgage as a university graduate. Here are some tips and advice that can help you achieve your homeownership goals. 🧐

 

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Build Your Credit Report💳

One of the most important factors that lenders look at when assessing your mortgage application is your credit report. This report will highlight your creditworthiness, based on your past and present financial behaviour. It shows how well you manage your money, pay your bills, and repay your debts. 📊

Having a good credit report can increase your chances of getting approved for a mortgage and getting a lower interest rate. Having a bad credit score or no credit history at all can make it harder for you to get a mortgage or make you pay more interest. 😬

Therefore, it is important to build your credit rating as early as possible and maintain it throughout your mortgage journey. Here are some ways to do that:

    • Check your credit report regularly and correct any errors or discrepancies. You can get your free credit report from the three main credit reference agencies in the UK: Experian, Equifax, and TransUnion
    • Register on the electoral roll at your current address. This can help verify your identity and improve your credit score.
    • Open a bank account and use it responsibly. This can help you establish a financial history and show that you can manage your money well.
    • Apply for a credit card and use it wisely. This can help you build your credit history and show that you can repay your debts on time and in full. Avoid applying for too many credit cards or loans at once, as this can lower your credit score and make you look desperate for credit.
    • Pay all your bills on time and in full. This includes your rent, utilities, mobile phone, broadband, and any other regular payments. This can help you avoid late fees, penalties, and negative marks on your credit report.

     

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    Reduce Your Student Debt 💰

    Another factor that lenders look at when assessing your mortgage application is your debt-to-income ratio (DTI). Your DTI is the percentage of your monthly income that goes towards paying off your debts, such as student loans, car loans, credit cards, or overdrafts. 🧮

    Having a low DTI can increase your chances of getting approved for a mortgage and getting a higher loan amount. Having a high DTI can make it harder for you to get a mortgage or make you pay more interest. 😕

    Therefore, it is important to reduce your student debt as much as possible and improve your DTI before applying for a mortgage. Here are some ways to do that:

      • Extra payments: Make towards your student loans whenever you can afford to do so. This can help you pay off your debt faster and save money on interest.
      • Refinancing:  If you have student loans you may be able to get a lower interest rate or better terms. This can help you reduce your monthly payments and save money on interest.
      • Avoid new debt:  Do not increase your existing debt while applying for a mortgage. This can help you keep your DTI low and avoid affecting your credit score.
      • Budget: Live within your means. This can help you save money and avoid overspending on unnecessary items.

       

      The image depicts several British £10 notes spread out as a cash deposit.

      Save for Your Deposit 💸

      Another factor that lenders look at when assessing your mortgage application is your deposit. Your deposit is the amount of money that you put down towards the purchase price of the property. It shows how much equity you have in the property and how much risk you are willing to take. 💰

      Having a larger deposit can increase your chances of getting approved for a mortgage and getting a lower interest rate. Having a smaller deposit or no deposit at all can make it harder for you to get a mortgage or make you pay more interest. 😬

      Therefore, it is important to save for your deposit as much as possible and aim for at least 10% of the property value. Here are some ways to do that:

        • Set a realistic and achievable savings goal and track your progress. You can use online tools and apps to help you plan and monitor your savings.
        • Open a savings account and automate your savings. You can set up a direct debit or a standing order to transfer a fixed amount of money from your current account to your savings account every month.
        • Take advantage of government schemes and incentives that can help you boost your savings, such as the Lifetime ISA, the Help to Buy ISA, or the Help to Buy Equity Loan. These schemes can help you save money faster and get a bonus or a loan towards your deposit.
        • Cut down on your expenses and increase your income. You can do this by reducing your spending on non-essential items, finding ways to earn extra money, or asking for a pay rise.

         

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        Get Professional Advice 🙋‍♂️

        One of the best ways to get a mortgage as a university graduate is to get professional advice from a qualified and experienced mortgage broker. A mortgage broker will conduct their mortgage research to help you find the best mortgage deal for your needs and circumstances, guide you through the application process, and answer any questions you may have along the way. 🙌

        A mortgage adviser can also help you overcome some of the challenges and uncertainties that you may face as a university graduate, such as:

        • Locating lenders: Open to providing mortgages to university graduates, even those with minimal credit history, significant student loans, or limited income.
        • Accepting employment contracts: Some lenders may consider your employment contract as sufficient proof of income, which is beneficial for graduates on temporary, fixed-term, or zero-hour contracts.
        • Offering higher LTV ratios: Certain lenders might be more flexible, offering a higher loan-to-value ratio, which means they’re willing to lend a larger percentage of the property’s value.
        • Providing special deals: It’s possible to find mortgage providers that offer exclusive deals to graduates, such as reduced interest rates, lower fees, or cashback incentives.

        Therefore, it is important to find a reputable and reliable mortgage adviser who can help you get a mortgage as a university graduate. You can do this by asking for recommendations from friends, family, or colleagues, searching online for reviews and ratings, or using comparison websites or directories.

         

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        Conclusion 

        If you’re a recent grad looking to buy a home, here’s what you should do. First, make sure your credit score looks good by checking your credit report and fixing any mistakes. Then, try to pay off your student loans faster if you can. This will help when you apply for a mortgage. Also, start saving for a down payment on a house. A clear savings goal can keep you focused. And lastly, talk to a mortgage broker. They can give you really good advice and unlock better mortgage deals for university graduates

        Contact West Wales Money today because we can get the best mortgage rates for university graduates!

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        Logo, West Wales Money🏠 Smart decisions lead to successful mortgages! 🏠

         

        ☎️ Call 01239 727990  or 07508 147884

        📩 Email info@westwalesmoney.co.uk

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