Your home may be repossessed if you do not keep up repayments on your mortgage.

The Financial Conduct Authority does not regulate most Buy to Let Mortgages.

Can I get a mortgage based on my PhD income?

This is something that we help with all the time, pretty much on a daily basis in fact. We’ve written blogs on it before but sometimes it’s helpful to look at a real example to help you relate.

Let’s look at a case study of a recent enquiry we received.

Initial Enquiry

We were approached by a young couple, looking to purchase their first home together.

  • Applicant One is working in an employed position earning a basic salary of £25,000.
  • Applicant Two was 12 months into their funded PhD and was in receipt of the tax-free stipend income of £15,609 per annum. As with most funded PHDs, this funding was in place for 4 years in total so had 3 years remaining. They also worked for the University on an Ad-Hoc basis as a lecturer and had done since they started the PhD.
  • They had a deposit that equated to 10% that was a mix of their own personal savings and parental gift.

Research and Recommendation

As they were in the early stages of house buying they just wanted to know if it was possible, how much they could borrow and what sort of interest rate they might be on. This way they could plan and start to look for property in their area.

To start, we ran through a 20-30 minute telephone call where I gathered a bit more information on their finances. As well as discussing any outgoings they had (i.e credit card debts, personal loans, car finance, etc) we discussed their income in a bit more depth. This included questions about potential future career plans following the completion of the PHD as well as a bit more details about the lecturing work they also do. Details like their average hours per month and total earnings from this over the last 12 months.

We then had enough information to approach the lenders we work with regularly to discuss the specific situation and see how much they could lend.

We reported back to the client with a detailed email that included:

  • How much they could borrow, subject to credit.
  • The likely interest rate based on the current market.
  • An example of a purchase price and monthly mortgage cost given their deposit.
  • A list of documents needed to move to the next step.

This couple were very motivated and returned the required documents quickly to allow me to take their mortgage to the next stage.

I provided my formal recommendation and they asked me to proceed with a credit check so that we could obtain an Agreement in Principle (AIP).

With the AIP in hand and all the information they needed on monthly budgets and costs, they were armed with everything they needed to house hunt and potentially put in an offer on the right place.

Flash forwards a few weeks and the perfect place came on the market. As they had everything they needed, they viewed it the same day and put an offer in. The offer was accepted, and we applied for the mortgage 24 hours later.

The details of this mortgage were as follows:

Purchase Price: £231,000

Mortgage: £207,900

LTV: 90%

Term: 35 years

Repayment Mortgage

Interest Rate: 1.81% fixed for 2 years

Product Fee: £995 (Can be added to the mortgage)

Valuation: Free basic valuation and £750 cashback

Monthly Payment: £671.80

Post Application

Once we applied for the mortgage we managed the application for the clients, keeping them regularly updated and we received their formal Mortgage Offer within 2 weeks.

This was then sent to their solicitor (as recommended by us) and we kept in contact with them all through the legal process.

Ultimately the clients moved into their property 1 month, 2 weeks and 6 days after viewing the property. 2 months and 3 days after we first spoke.

I will mention, this is incredibly quick. A little quicker than we’d usually expect due to the Seller being as motivated as we were. Still a fantastic result that shows what is possible if everything comes together.

Client Feedback

Summary

Getting a mortgage based on stipend income absolutely is possible. We love it and we love helping people that are often let down elsewhere due to a lack of understanding and fewer options.

We are happy to talk through all the options with you, find the right lender to arrange the mortgage for you.

If you are thinking of buying a property but you aren’t sure if it will be possible given your income, then do give us a call on 0117 332 5197. Our initial conversations usually last around 20 minutes.

Alternatively, you can email enquiry@lloydwellsmortgages.co.uk and let us know how we can help you.

We will discuss:

  • How much you can borrow
  • What that will cost
  • What fees can you expect
  • How Lloyd Wells Mortgages work
  • What insurances you will need
  • What documentation you will need to provide
  • Next steps

Your home may be repossessed if you do not keep up repayments on your mortgage.