Graduate Mortgages

Graduate Mortgages
Graduate mortgages are a relatively new product on the mortgage market.

They are typically available to people who have been employed for over a year and who have graduated within the last seven years. Often, the loans include lending to cover costs associated with taking out a mortgage and buying a house, such as legal fees and stamp duty.

Most lenders that promote graduate mortgages offer interest only, discounted rate and tracker options. Interest only mortgages are particularly attractive to recent graduates because monthly repayments are considerably lower than for other types of mortgages.

Income multiples can be up to four times the borrower's salary, although some mortgage lenders will even go above this. For those graduates who qualify as professional, mortgages from some suppliers such as Natwest will offer enhanced income multiples.

Discounted rates are very useful for recent graduates as this will often mean that a lower rate is offered for a set period, for example, 2 to 5 years. During this time, there are normally penalties if the mortgage is redeemed during the discount period.

For a good overview of the current mortgage products available on the market it's worth working out what you can afford properly. Take a look at Alliance and Leicester's mortgage calculator to work out your mortgage accurately.

Source: MoneyHighStreet