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.
Northern Rock not planning graduate mortgages
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Northern Rock not planning graduate mortgages
Wed, 14 Jun 2006
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