17 replies to this topic

[Minigirlracer]

Im nearly 22 and about to begin a PGCE through my work to become a college lecturer. I was just wondering if I was to apply for approx £8k student loan to help with a deposit for a house with my partner would this affect the chances of getting a mortgage? Should I apply and use it for a deposit or not bother having a loan and continue to save like I am already doing?

I am working full time whilst I complete this course as it is in the evenings, Im not full time at Uni or anything and still on full time pay...

[Gaffer]

Im nearly 22 and about to begin a PGCE through my work to become a college lecturer. I was just wondering if I was to apply for approx £8k student loan to help with a deposit for a house with my partner would this affect the chances of getting a mortgage? Should I apply and use it for a deposit or not bother having a loan and continue to save like I am already doing?

I am working full time whilst I complete this course as it is in the evenings, Im not full time at Uni or anything and still on full time pay...

I may be wrong but i thought it was illegal to get a loan to get a deposit for a house? Depending on how easy it is for you to save, and how quick you want the house, i personally would save. You would only have to pay back the loan AND a mortgage.

[Ouster]

Save up for a deposit, reduce your risk.

[gav]

They'd never know, take the money out and put it back in a few months later and say you sold your car etc. To be honest you want really notice you're paying back your loan and if you are then you'll be earning enough not too worry too much if you know what i mean. The advice i was always given was to completely ignore the student loan really as it's the cheapest loan you're ever going to pay back in terms of interest and it doesn't affect your credit rating after all if you dont earn enough you never have to pay it back anyway.

[998dave]

A few issues.

If your doing it at PGCE level I presume we're talking a personal development loan from a bank? They WILL see this as a debt against you, (unlike student loans company loads, that need to be stated, but are no seen as 'debt' in the same manner).

As such I don't think this'll work, also with the current lending market, an unsecured loan will cost you approx. £10K to pay back, depending on the length of the contract you sign up to. This will need considering, assuming it's even possible.

I think you'd be better to carry on saving!

Dave

[minimadjonesy]

Don't take it as a student loan! My brother still has a student loan and he's 29 (pying it off since he left uni 8 years ago) and he cannot get a mortgage now because of it!

If you're after 8k it does depend on how good your credit rating is but virgin Credit cards are quite good, You can transfer money to your current account for a fee of 3% and then have it at a 0% interest rate for 16 months! Cheapest way to borrow money! And as long as you pay it off in teh 16 months then you'll only pay £240 interest in total!

[gav]

No one can get a mortgage at the mo, i doubt it's anything to do with his loan.

[daddycool]

I spent one of the 3 installments of my student loan on a mini 30. It was awesome! best thing I ever did.

[91neon]

i sell loans at a bank and it will show as a debt also you will need to prove your loans purpose so you will not be able to use it as a deposit as usualy funds go direct to course. when seen as an 8k debt the lender will reduce the amount of mortgage by 8 k 9 times out of 10.

sorry

[dave21478]

Am I missing something here?
Surely a large part of the point of a deposit is that it is money you have saved up, reducing the size of the mortgage? Getting a loan (which has to be paid back sooner or later) to use as a deposit seems like a very stupid idea indeed, as you will be paying back your mortgage AND your deposit loan at the same time. Its unlikely that any personal loan will be at a better rate than your motgage, so this really doesnt make financial sense to me.

[nurseholliday]

Yes you are missing something.

A student loan has very low interest and you aren't required to start paying it back until you are earning £15k+ and even then the rate of repayment is proportional to your salary so it remains almost unnoticeable. Essentially a student loan is not supposed to hinder your financial situation whatsoever.

[nurseholliday]

i sell loans at a bank and it will show as a debt also you will need to prove your loans purpose so you will not be able to use it as a deposit as usualy funds go direct to course. when seen as an 8k debt the lender will reduce the amount of mortgage by 8 k 9 times out of 10.

sorry

Only if it's a tuition fee loan.

You can do whatever you want with your student loan. A friend of mine's parents are overflowing with money, so he used his student loan as his way of buying nice things.

One year he bought a £1000 bike, a new iMac, and a Golf GTi.

[Grimmy@JHE]

its where my golf came from.
and yes, thankyou tax payers.

Edited by Grimmy@JRE, 09 June 2009 - 01:00 AM.

[998dave]

Yes you are missing something.

A student loan has very low interest and you aren't required to start paying it back until you are earning £15k+ and even then the rate of repayment is proportional to your salary so it remains almost unnoticeable. Essentially a student loan is not supposed to hinder your financial situation whatsoever.

But you won't get £8K for a student loan from the student loans company, maximum of £4K a year.

I think the OP was asking about a personal development loan, of the sort you get from banks, (and I got for my M.Sc course), I borrowed 8K with 18 months to start of repayment, and then 5 year repayment schedule. Glad I did, but it's hard work losing £150 a month...

Dave

[nurseholliday]

Oh right.

In which case, don't listen to me.