Student mortgages

[Crossover]

Has anyone had any experience with obtaining mortgages for students? My daughter is wanting to purchase a 3-4 brm house and get 2-3 flatmates in. Her main income will be the board paid plus student allowance. She will do some part-time work. She could also use the living costs part of her student loan to help service a mortgage. I would be guarantor for her if required.

Does anyone know how the main banks might view this type of proposal? She appears to meet the criteria for the Welcome Home loan also.

[Monkeyboy]

It shouldn't matter if she's a student. It comes down to serviceability. The student loan is not considered income. With you as Guarantor you would also need to be able to afford the loan if your daughter couldn't and therefore the bank would want to know your position. you may only need to guarantee a portion of the amount rather than the entire loan. Not entirely sure about Welcome Home Loans but if your daughter meets the criteria it shouldn't be a problem.

[mlkmnz]

I don't think the banks like lending money to be serviced by yet more lent money.

I'm with Monkeyboy, it's going to come down to you more than your daughter at this stage.

[tricky]

Why not buy the house yourself, install her as the tenant and claim the expenses, deprcn back as you would a normal rental?
Later on she can buy it off you.

[Monkeyboy]

Or do a joint venture with your daughter. That way you both gain out of the situation.

[Keys]

Has anyone had any experience with obtaining mortgages for students? My daughter is wanting to purchase a 3-4 brm house and get 2-3 flatmates in. Her main income will be the board paid plus student allowance. She will do some part-time work. She could also use the living costs part of her student loan to help service a mortgage. I would be guarantor for her if required.

Does anyone know how the main banks might view this type of proposal? She appears to meet the criteria for the Welcome Home loan also.

I suggest you buy half of the house, have a seperate housing loan, have a property sharing agreement etc.

Can be done but don't go guarantor for her loan unless you trust her implicitly. Many parents have lost much doing that.

[robbyp.]

Won't owning a house affect the student allowance, as is't it asset and income tested. You could be best to talk to a finance person, as you may be best to buy the house yourself for her.

[Contrail]

Student Allowance is not asset tested.

[robbyp.]

Student Allowance is not asset tested.

Maybe , however it will be income tested, and any income will affect the allowance. Personally I wouldn't buy a house at the moment, as property prices are going to drop a lot, and you could end up owing more on the mortgage than the house is worth. The only time I would consider buying a the moment, is if the return from rent would be greater than 9% return. I would still get advice from a financial advisor to see if it is worth it.

[Perry]

Couldn't most/all the income asset dilemmas
be solved with an appropriate structure?

[robbyp.]

Couldn't most/all the income asset dilemmas
be solved with an appropriate structure?

Possibily by family trusts etc. However if you are getting a government benefit (eg. a student allowance) where us taxpayers are paying, I think they have rules to prevent people benefiting from various structuring. If they don't they probably should.

[Crossover]

Hey, thanks for all the collective wisdom guys, it's much appreciated. It gives me lots of food for thought & ideas for different approaches