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?

Why not? Based on OP’s description, we know nothing to arrive to that conclusion. OP is here asking random strangers if she should quash her sister’s aspirations rather than get an objective view by simply ringing a bank. It doesn’t give you the impression that OP is someone who knows much about the topic.

No I haven't looked into it, but I already know (having gone through the mortgage process myself) that they are unlikely to accept someone who has no credit history or job. Isn't that obvious?

I don't know what thread you're reading but there's no suggestion she'll actually get a mortgage considering she has no rental history and no income.

Well the OP's sister doesn't have a job, has no credit history and can't use her student property rent as proof.

It doesn't take a genius to work out that she won't get a mortgage.

I'm shocked that some people think you will get a 100% mortgage when you have paying rent from a student loan and parents topping up. Single DS would be likely be eligible for this as he had been paying rent and bills on a flat by himself for some years now, it is aimed at people like that with at least a year's rental history with no help

What I've got from this thread that is if someone comes to you suggesting something completely unrealistic and unachievable in the current circumstances, you should just smile and nod rather than actually being honest and giving useful suggestions as to what they can do to actually achieve this goal...

It might be better to give her some advice about building up credit history. If all she's been doing so far is a house share that your parents pay for and no job it's unlikely she's going to get a mortgage straight out of uni. She could do it within a couple of years though depending on where and what she wants to buy. Personally I found properties were about ten times my starting salary so no way I could have done it just on the multiplier but depends on prices where you live.

I'd deff talk to her about sorting out a credit rating. Encourage her to take out a credit card in her name. Put something small on it once a month and make sure it's linked to pay the full amount in direct debit. My dad did this with me when I was 18 so when it came time to move out I had a great credit history. Just make sure she's clear it's only for use for small purchases or emergencies so she doesn't get into debt

Many PP are still stuck in the pre-2008 era, when mortgages were given bout like candy. Take no notice of them.

Having been through it myself recently you are absolutely right, lending criteria is very strict.

What's more surprising here is your sister's seeming lack of critical thinking as a university graduate, i.e. making decisions based on a few headlines. Why had she not looked it up online?

This is important because if a mortgage ASAP is her main goal she should get a graduate job somewhere other than London. Or perhaps, she could start saving now, etc?

The multiplier for the 100%mortgage is also very low by the way. It's the lower of rent and the 'affordability calculator' which from people using it , has capped it 3x income.

It probably depends on how you said it Op?

If you didn't know anything about the scheme she was talking about why not just say so?

Only from people who are ignorant

@otherwayup

I'm not unsupportive, patronising, green eyed or old thanks.

There's no point in arguing with
her sister, what will be, will be.

However, it's interesting to see your only contribution to the thread is purely to criticise my post 🙄🙄🙄

I work for a mortgage broker. Skipton have sent us all the info. She will not qualify for their 100% mortgage on graduation. There is no might or maybe about it.

In order to borrow £123,000, you need to have been paying £750 a rent, on your own rented property, for 12 months. To buy a house at roughly the average, £250k, it's £1.5k rent a month.

Out of interest have they said what the income multiplier is?

Ha ha! My DF told me I was naive when I applied for a mortgage in the 1980’s, and that I was delusional for calculating that the mortgage would cost me less than the keep I was paying my DP’s monthly.
The joke was on him, as I was working for a building society, and qualified for a 4% mortgage (the normal rate was 11%), and the repayments were £50 per month less than my keep, so at 20, I became a homeowner!

Great that you became a homeowner aged 20, but that was 43 years ago... times have changed

Your sister will also need the money for surveys, solicitors fees moving fees, furnishings etc. She is being unrealistic, but she will soon find that out.
Instead give her advice about getting a good credit score, getting some savings under her belt for the fees and such, at least that's useful advice anyway for the future.

It's 2023.
Not only are preferential rates and 0 deposit mortgages virtually non-existent. We also have access to the internet with detailed guides, and lending criteria published.
There are loads of affordability calculators, FREE mortgage brokers.

It's all there to find, I'm surprised she even needed to ask for 'advice'.

To be fair to you, you had done the research and your DF laughed at you.

OP's sister has done zero research, just got excited by a couple of headlines.

If you read all of OP's updates, that's exactly what she's done.

That's interesting, thank you. So not HMOs? My kids pay £600 a month but for a shared student house, so it wouldn't apply to them?
I hadn't even known this existed as an option and was thinking guarantor mortgage with a room rented out to pay the mortgage but this may be another option in a few years.

Useful information anyway, thanks

And that's relevant how...?

In the old days all you needed was 3 months of payslips from a temp job.

Imo things were better then.

THIS!

Then why didn’t you just google it instead of coming on here? It would have been quicker and it does sound like you’re being a little bit spiteful

My DD, who was working part time (she is autistic) had a chat with a mortgage broker. A year later she got were she needed to be. At 25 she now has a mortgage. There are more flexible ways now than there were a few years ago and while you might not get the best rate, it's cheaper than renting. Having raised three teens to now adults, learn to back away if it isn't anything dangerous and suggest having a chat with an expert. Realistically she could get a mortgage six months after graduation, more likely twelve, depending on the property prices in the area. Personally I'd be advising her to have a think we're in the country (if not the world) she wants to live, rather than worrying about tying herself to a property yet.

You have to be covering the expenses of an entire household alone or with the person you're applying with. Utilities, insurance, council tax.