Graduate
mortgages are becoming a more common
loan product, as
lenders encourage
graduate first-time buyers to take the first step onto the
property ladder . Scottish
Widows has recently launched a graduate range. However, the popular
lender Northern Rock has said that they do not plan to follow their
rival company into the market.
‘Graduate mortgages’ are a relatively new product aimed at those first-time
buyers who have left
university and are struggling to enter the
property market . Often this sector is facing hefty
student debt, and is new to financial concern.
Generally,
graduate mortgages offer 100 per cent
loan to value, and the
buyer uses a guarantor to support their application. Generally, a guarantor will be the parent or guardian of the buyer.
Northern Rock was clear in stating their position: "We currently do not offer mortgages specifically for graduates and have no imminent plans to do so. We provide all
customers with
choice and a wide range of competitive products, some of which may be suitable for graduates. Our responsible lending policy is designed to ensure that borrowers do not become over committed and are able to afford their monthly
payments ."
A recent survey by
Lloyds TSB found that 22 per cent of higher education students were planning to live with their parents following graduation. The first rung of the
property ladder remains out of reach for many.
