Student Living and Mortgage Possibilities: Understanding the Realities
As a student, finding suitable accommodation can be a top concern. Many students face the dilemma of whether to rent a property or explore other options such as getting a mortgage. While it may seem like an unconventional choice, there are indeed mortgage possibilities for students. In this article, we will explore the various student housing options and delve into the realm of student accommodation and mortgage schemes.
Student Housing Options
When it comes to student housing, there are typically three main options to consider: university-owned accommodation, private rentals, and purchasing a property. Each option has its own advantages and disadvantages, and the right choice depends on your personal circumstances and preferences. Let’s take a closer look at each of them.
1. University-Owned Accommodation
Many universities offer on-campus accommodation for their students. This can be a convenient option, especially for first-year students who are new to the area. University-owned accommodation often provides a sense of community and proximity to academic facilities, making it a popular choice.
However, it’s important to be aware that university-owned accommodation may have limited availability and can be more expensive compared to private rentals. Additionally, the lease terms are usually aligned with the academic year, which means you may need to vacate the premises during holidays.
2. Private Rentals
Private rentals are widely available in most university towns and cities. These can range from purpose-built student accommodation buildings to privately-owned houses or apartments. Renting privately gives you more flexibility in terms of location and property type.
However, private rentals come with their own set of considerations. The cost of rent can vary significantly depending on the location, size, and condition of the property. Furthermore, you may be required to pay a deposit and provide references or a guarantor.
3. Purchasing a Property
While it may not be the most common option for students, purchasing a property can offer long-term benefits. If you have the financial means and are planning to study in the same location for several years, buying a property can be a viable alternative to renting.
By purchasing a property, you become a homeowner and potentially build equity over time. This can be seen as a long-term investment and a way to avoid paying rent. However, it’s important to carefully consider the financial commitment and the responsibilities that come with owning a property.
Student Accommodation and Mortgage Schemes
Now that we have explored the different student housing options, let’s delve into the mortgage possibilities for students who are considering purchasing a property. While getting a mortgage as a student may not be as straightforward as for those with a stable income, there are schemes and options available that cater specifically to students.
1. Joint Mortgages with Family Members
One option for students is to apply for a joint mortgage with a family member, typically a parent or guardian. This can increase the chances of approval since the family member’s income and credit history are taken into account. Additionally, having a family member as a joint mortgage holder can provide a sense of security for lenders.
2. Guarantor Mortgages
Another possibility is a guarantor mortgage, where a family member agrees to guarantee the repayments if the student is unable to meet them. In this scenario, the lender assesses the guarantor’s financial situation and credit history to ensure they can support the mortgage if necessary. A guarantor mortgage can increase the likelihood of approval and potentially offer more favorable interest rates.
3. Shared Ownership Schemes
A shared ownership scheme allows you to purchase a share of a property, typically between 25% and 75%, from a housing association or developer. You then pay rent on the remaining share. This can be an attractive option for students as it reduces the upfront costs and can make mortgage approval more attainable.
4. Buy-to-Let Mortgages
If you are considering purchasing a property with the intention of letting out some of the rooms to fellow students, a buy-to-let mortgage might be an option to explore. Buy-to-let mortgages are specifically designed for landlords and can provide the necessary funding to invest in a property for rental purposes.
5. Specialist Student Mortgages
There are specialist lenders who specifically cater to student borrowers. These lenders understand the unique circumstances and financial challenges faced by students and offer tailored mortgage products. While the interest rates may be higher compared to traditional mortgages, these specialist options can provide a viable solution for students who want to enter the property market.
It’s important to note that getting a mortgage as a student may require careful financial planning, thorough research, and the support of experienced professionals such as mortgage advisors. Before making any decisions, consult with experts in the field who can guide you through the process and help you make an informed choice.
To conclude, while getting a mortgage as a student may seem like a daunting prospect, it is indeed a possibility. By exploring the different student housing options and understanding the various mortgage schemes available, students can make educated decisions about their accommodation choices. Whether it’s university-owned accommodation, private rentals, or purchasing a property, there are viable paths to secure suitable housing during your student years.