How Students Can Get a Mortgage: Best Tips
Getting a mortgage for a property can be quite challenging for students, especially when you don’t have a steady stream of income. In such a scenario, check out the requirements of different lenders before applying for a mortgage. Here, we will share some tips on buying a house as a student.
Best Tips to Get a Student Mortgage
Some students worry about finishing their assignments on time or fulfilling job responsibilities to pay the house rent on time. The life of a student is quite stressful at times. If you are juggling with never-ending assignments with strict deadlines and are looking for an essay writing service that can deliver the task for you, then you should try EduJungles, which is a reliable and authentic writing service provider, helping students submit quality assignments on time. While some students are so careful about their assignments and other responsibilities, others enjoy their student life and carefree days without worrying about the future. However, it is always wise to buy a property of your own at a young age to avoid spending a fortune on monthly rental payments. Before we delve deep into the various tips and tricks on how to get a student mortgage, let us first understand what a student mortgage is?
All About Mortgages for Students
College students don’t always have to waste their money on rent. What if you leave college, you have saved some money, get home equity and a college degree? Don’t worry; all of this is doable only if you are smart enough to explore all the possibilities. The truth is that being a student getting a property of your own can seem a far-fetched idea, but if you are intent upon buying a house as a student, then you should be able to get a home loan, even while you are studying. One of the many challenges students face is to take out loans for their studies. Most students don’t have the time and liberty to do full-time jobs during school hours. While it is necessary to have a credit history, keeping a good level of cash flow is equally important. If mortgage lenders feel that you are incapable of managing your monthly payments, then your application will be denied.
Eligibility Criteria for Getting a Mortgage
Buying a house with student loans can be challenging. You should know if you fit the bill or not before applying for it. If you are not getting a full-time salary, you will have difficulty proving that you are completely capable of getting a mortgage. There are a few things the lender sees in you before approving the loan.
A credit score that is above 600
A steady stream of income that can help you pay your mortgage payments on time
A low debt-to-income ratio below 36%
A 20% down payment that needs to be paid immediately for a conventional mortgage
If you are able to meet the eligibility criteria, then it should increase your chances of getting a student mortgage.
Buying a House with Student Mortgage
Since student mortgages are gaining popularity, it is quite easy to find a lender. Without a steady stream of income and a full-time job, it becomes a high risk for lenders to approve student loans. However, there are a few strategies that you can have in order to become the best candidate for a house loan. One of them is to deposit a large sum of money and have a mortgage guarantor. Now you may ask, who is a mortgage guarantor? Well, anyone who can give mortgage payments on time in case you feel to do so can become your guarantor. It is usually your grandfather, your father, brother, sister or any blood relative whom you can trust and who can completely support you in case of any problem. There are a few things to consider when choosing a guarantor.
Does the guarantor have property where you wish to buy a home?
Are they the resident of that country?
Are they below 65 years of age at the time of submitting your application?
Can a student get a mortgage?
Your current debt-to-income ratio is perhaps one determining factor that sets you apart from other students. Lenders would prefer those students who have a smaller debt-to-income ratio. For instance, if a student has to pay 500 USD as a monthly mortgage payment and a 400 USD to make for the car payments, and you have a meager salary of USD 1700 because you can only do part-time work due to a hectic schedule at school, you have a high debt-to-income ratio, and you are most likely not a suitable candidate to win the loan.
But if you are able to pay the monthly charges without incurring debt, then/ you may be a suitable candidate for it. Either your family member, guarantor or your employer would pitch in to help you meet your expenses on time.
Advantages and Disadvantages of a Student Loan after you Graduate
One of the biggest advantages of getting a student loan is that you get a house of your own. It also establishes good credit when you are able to make your payments on the scheduled time. So, once you graduate, you will have both a house and a degree and a bright future. On the other hand, it is quite risky to start your adult life with debt. Student loan debt can also hamper your other financial and lifestyle goals. There is also a penalty on not making the scheduled payments on time which can affect your financial stability once you graduate as you will be making payments to compensate for the loan.
How to Seek Help?
If you are a student juggling with assignments and other important tasks, then it is always wise to hire the services of a mortgage broker. They can search through the market and find the best deal for you. Also, make sure you are not required to stay in school and can commit to the location. You will also be required to save some costs in the maintenance and upkeep of the house. Once you graduate, you can always rent out your home as people are always coming in and moving out and looking for a place to live. It can be a good investment in the long run.
We hope we have answered your query. Can a student get a mortgage? Remember, it is always safe to appoint a guarantor who can pay on your behalf in case you are not able to pay for your monthly payments, and voila! You will have a property of your own.
