To think my sister is being naive for thinking she will get a mortgage as soon as she leaves uni

[thefantasticfour4]

My sister is 20 and due to graduate uni next year. She is absolutely adamant that she will be able to get a mortgage as soon as she graduates. This is based on her apparently doing some research into some new scheme where you can get a mortgage without paying a deposit (haven't actually looked into this myself so have no idea about it). She says that she will qualify for this as one of the requirements is that you privately rent for 3 years, and she has been paying for her uni accommodation (actually, she pays for a fraction of her accommodation and my parents cover the rest). Apart from this, my sister has never paid a bill in her life so has virtually no credit history.

I've told her she's a bit naive if she thinks she'll be able to get a mortgage as soon as she leaves uni. After I left uni, it was years before I even qualified for my mortgage. She's now completely flown off the handle and said I'm not supportive of her being ambitious and having goals. So am I being a bit harsh in thinking this is a completely ridiculous and unrealistic goal?

So if you've not looked into, why not just say "where there's a will, there's a way!" rather than default to the negative?

She'll need a job and probably six months pay slips.

I got a mortgage 6 months after graduating. I needed to show 6 months payslips. At the time they offered 97% mortgages. With no job, she has no chance but maybe best not burst her bubble. She'll find out soon enough

She could she use her uni accommodation payments as evidence of paying rent?

@thefantasticfour4

I've often found in life that people who are very adamant and speficic about a target often get it.

I would apologies to her and say you are talking from your experience and that hers will be different and you didn't mean to sound like a energy sapping doom monger

@thefantasticfour4 only if she can proves she's been paying the full amount for the 12 months. You mentioned your parents have paid towards it so that would end up in the application declining sadly

Yeah Skipton announced last week they're offering 100% mortgages (no deposit needed).

They have criteria, like first time buyers only, aged 21 and over, have rented for 12 months and paid household bills for 12 months (proof required and no missed payments). And the mortgage payments can't be higher than the amount they've been paying in rent.

All other usual affordability criteria applies - i.e. needs a job, no bad credit etc.

100% mortgage for us too, but back 1969! I was still a student...

Why not tell her to live a little and enjoy being responsibility-free for a while.

Jeez calm down she is not jealous, I see where she is coming from to help her make more realistic plans but I would also advice OP tO let her be.

She may get it it she may not and if she doesn’t she will seen and adjust, not worth fighting over.

If she's earning enough she could get a 100% mortgage, after being in a job for 6 months or so. It's definitely possible.

Her uni accommodation won't count as proof of paying private rent - the 100% mortgage is only for "household-to-household" moves. So you have to have been renting the whole property and covering all the bills yourself to be eligible. Rent as part of a house share and split bills don't count.

As a mortgage product, it's really designed for families who would have been stuck in private rentals and unable to save for a deposit because their rent is so high. A guarantor mortgage might be suitable in her situation, or just saving for a few years like most people have to do!

This is what I thought, thank you

I think the best thing to do is to tell her you haven’t heard of this scheme and don’t know the details. Then ask her to send you the info so you can read it it in order to give good advice.

She’ll either find out in her research that she’s mistaken or do the legwork so you can tell her she’s mistaken. There’s always the chance she’s correct, and in that case you don’t come across as a dream squasher.

If she thinks she can get a mortgage without even a job offer then that's just silly. What career is she going into? Because for a lot of jobs out there the banks will wish you to be employed for a certain period of time before they would trust that you're likely to remain employed etc. I would just tell her once she's got a job offer and confirmation of the wage that she can go on the various websites or speak with a broker and get an informed idea of what's possible/available for her. But just to cover the bases consider alternatives like living with parents/saving whilst starting out in employment, house share etc.

As others have said though most likely she'll need to have been employed for a certain amount of time before they'll consider her, and likely they'll want a guarantor as well. There are a few careers where they're sometimes not as stringent though i.e. Doctor.

Exactly as above on it being designed for renters.

Also, it's not a new scheme, it's one product from a lender which is very unlikely to still be around in July 2024. It's not funded by anyone, like Help to Buy or similar which ran for 10 years.

Aren't all the 100% mortgages guaranteed by the family?

Honestly, you sound like you are a bossy older sibling who always knows best and drives your sibling up the wall. No wonder they went mental at you. You sound patronising and domineering.

As others have said she would need to be paying 100% of rent herself and bills before being eligible for the 100% mortgage. I’m buying at the minute and you don’t need to provide six months of payslips anymore (although I’m not doing a 100% mortgage), lenders will take into account your contract. I would suggest to her that it’s unlikely to be immediately as she graduates but if she secures a position and pays her rent and bills for a year then she might be in a position to buy a year after graduating - which is still pretty good. If she wants advice from you I would tell her how to build her credit score, not to use her student overdraft. I would also advise her that depending on where she lives she might not be able to afford it on her starting salary so maybe she needs a plan for increasing her salary over a few years or she needs to consider cheaper areas. This will come with a caveat of the lender not pulling that product before then or interest rates rising before then.

You know nothing about me or my sister to make such statements. My sister and I are very close and she often comes to me for advice since I'm almost 10 years old than her. I didn't want to just say 'yeah you can get a mortgage straight after uni' if it wasn't a realistic, viable option.

All you need to say is “great idea if it can be done, see what a mortgage advisor can find for you”

Either she can or she can’t. Your opinion won’t make a scooby of difference so why make an argument of it?

Projecting much ??

The OP is essentially right.
She's also explained that her sister came to ask her for her advice / opinion. She hasn't overheard her sister having a conversation with her mates and then jumped in to criticise.

I'm not making an argument out of anything, I just didn't want my sister to get her hopes up for something that might not even be possible

Don't be that person, op.
It's so soul destroying to have someone constantly trying to 'stop someone getting their hopes up'.
It's just a type of control so you don't have to deal with your own emotions watching someone else get upset.
What it risks is stopping people pursuing dreams. Why be that person?

Martin Lewis has a guide on the 100% mortgages: https://www.moneysavingexpert.com/news/2023/05/skipton-no-deposit-mortgage-compares/?utm_source=MSE_Newsletter&utm_medium=email&utm_term=16-May-23-805d32549424bdaab41-6463d7ae5b1780267ac800e908763d83&source=CRM-MSETIP-805d32549424bdaab41&utm_campaign=nt-hiya&utm_content=38
Essentially no it sounds like she won’t be eligible as she presumably won’t have proof of paying bills and her mortgage would presumably be higher than her student rent.