My husband and I both have research council funding amounting to c.30k tax free. And yet, for some reason unbeknown to me, mortgage providers refuse to accept that it is '"income". The one that will will only provide a mortgage at 60% of what we get, despite the fact we don't pay tax (meaning they'll only give us a mortgage of c.65k which is good for nothing).
I know there's a credit crunch, but given we have guarantors who could cover the mortgage many times over if we defaulted, it seems ridiculous. We've no debt between us of any sort... Sorry this is just a bit of a rant but I think one that's indicative of the low esteem that PhD students are held in. I got the 'the situation will change once you've finished your course and got a proper job' grrr.... I neglected to point out (a) a PhD isn't a 'course' and (b) there is nothing 'improper' about what I do ,)

I forgot to add, we also have a 50k deposit!

Although this was about 3 years ago now (that is before the world ended!) a friend of mine and his girlfriend - both PhD students - managed to get a mortgage for a flat. Their parents coughed up the deposit, so they were probably in a worse position than you, but through a friend who was a financial advisor they got one. It may be worth your time to invest in a financial advisor despite the cost

With the credit crunch they are really clamping down. Not helpful to you though. I experienced the same and so am just sitting it out but it's making me depressed. Basically, we are being punished for others stupidity with money!

Thanks for the advice SH... unfortunately we've already been to see an independent financial advisor and he told us that pretty much everything has dried up due to the credit crunch, so what might have worked before doesn't any more :-(

I feel for you Pamplemousse. It is gone all a bit ridiculous, really. Hopefully things will change soon, good luck.

There have been quite a few previous posts on this so have a search through them. However the situation has probably changed since then. I had a lot of trouble getting a mortgage but eventually did. My husband had a 'proper' job but it took ages to find someone who would accept my income as real. We only had a 5% deposit so I think we were lucky to get a mortgage in the end and I think we would have no chance if we were doing it now.
I would suggest that you go to a different financial advisor. The fact that you have £50k deposit should be a big plus. I know when we were looking there were some lenders who would accept PhD stipends - Godiva (part of Coventry), Lloyds, and some others who I can't remember. Good luck with it.

It is frustrating. I also would like to buy a small house. I have 50K as a deposit and no debts at all, plus I only want to borrow about 50 or 60 thousand, but was told that my stipend doesn't count as income and, in the words of one mortgage advisor, "You're stuffed". I also feel that I'm suffering due to the stupidity of the banks themselves in giving money away to people who clearly could not afford it. If anyone has any success in this area, please do let us know how you did it.

Pamplemousse, did you see a whole-of-market mortgage broker and not just apply directly to the lender? I spoke to a family friend who is a mortgage broker about this issue and he seemed to think that if we had a guarantor we would be able to get a mortgage. We didn't get to the applying for a mortgage stage yet though - haven't found a house we like yet either. We may well hit the same problem as you.

Ejc,

I'm told that you're best having a mortgage lined up before you find a house you buy as putting in an offer before knowing what you'll be leant is a touch unethical....
I went to a whole-of-market broker, who basically said we were stuffed. We've also had meetings with several banks to the tune of 'you're stuffed'. It's beyond ridiculous when my in-laws, who are in the middle of a 1.5 million (self funded) development, are prepared to guarantor us but that seemingly counts for nothing. It's just been suggested we raise the cash, which is near impossible given that we have none and there's it tied up in assets (not that we'd want to drain them of cash anyway)......

I think we're all suffering for banks idiocity in the past tbh. But given the government have bailed them out, credit doesn't seem to be coming any more easily....

Bummer - we will probably find the same problem as you then.

I do agree that it is frustrating when people in a poorer financial position that you are now have been given large loans in the past.

(And I agree that putting in an offer if you don't have an Agreement in Principle is not on - we weren't planning to do that!)

If the object of the exercise is just to get on the property ladder, I wonder if it might be worth looking into the possibility of buying a 50% or 75% share of a house, via a housing association or some such? (I don't know the details of these schemes, but I know they exist.) That 65k mortgage you mention, plus your 50k deposit, might just be enough for those purposes.

Or there are more off-the-beaten-track options - you could probably pick up a very nice liveaboard canal boat for 50k, for instance!

Otherwise I suppose it's a question of putting that 50k to the best possible use (investment-wise) so you're in a strong position at such time as you do have 'proper' jobs.

I know none of these options is any substitute for the freedom to buy a proper house of your choice and within your means, though. You're right, it seems a ludicrous situation.

i was in a similar position to you not so long ago, and it is extremely frustrating knowing you can afford a mortgage and not being allowed to have one :-s however, my situation is slightly different to yours, as my partner has a 'normal' job and salary. even so, we were turned down by numerous places who refused to accept my stipend point blank (including Britannia, Barclays and Alliance & Leicester if i remember rightly).

we went to a whole of market broker before we started looking, who promised us it wouldn't be a problem. so we found a gorgeous house, put an offer in, and our broker mysteriously disappeared... he wouldn't return our calls (he works for a large well-known company btw) so we thought we were stuffed. but we thought we would keep trying anyway, so i trawled the high street getting turned down left right and centre! the halifax accepted my stipend in principle but wouldn't lend us as much as we needed. so eventually we got ourselves another independent broker and put in an application with C&G. and the good news is that after a LOT of problems along the way, we were finally accepted for a mortgage back in april, and are now happily settled in our new house :-)

we had to stump up a much bigger deposit than originally planned (25%) but it was worth all the hassle in the end. my advie would be keep trying, although i know that in my case having a partner with a job made a lot of difference. C&G also counted 75% of my stipend rather than the full 100% (god knows why!).

good luck ;-)

I wouldn't dream of buying at the moment.
Why not rent for a couple of years till the market settles down ?

You've got enough to think about at the moment without worrying about getting the roof fixed etc etc etc.

Its actually a really good time to buy - especially if you compare it against trying to buy at 'the peak' of the market a year or so ago. We are trying to sell our house (which is rubbish), it was valued at about £50k more at the peak of the market, so anyone looking to buy will get a really good bargain. It is just the mortgage issue which is a pain! If you buy a house that has been properly maintained, or know someone who can help you properly maintain it (DIY dad) then there should be no more stress in owning than renting a house.