Apprenticeships are an excellent way to gain practical skills and knowledge while earning a wage. However, you may wonder, “Can you get a mortgage whilst on apprenticeship?”
Becoming an apprentice is an exciting step towards gaining valuable skills and kickstarting your career. However, as you embark on this journey, you might wonder if securing a mortgage while on an apprenticeship is possible. The good news is that it is indeed possible, but there are several factors to consider and challenges to navigate.
In this article, we will delve into the details of obtaining a mortgage on an apprenticeship and provide you with the necessary information to make informed decisions.
Understanding the Basics
Before we dive into the mortgage application process, let’s establish a basic understanding of apprenticeships. An apprenticeship combines on-the-job training and classroom instruction, enabling individuals to learn a trade or profession while earning a wage. Apprenticeships typically last for a fixed period, during which apprentices receive practical experience and training in their chosen field.
Factors to Consider
Certain factors come into play when applying for a mortgage on an apprenticeship. Lenders assess various criteria to determine your eligibility and the amount you can borrow. Here are some key considerations:
- Income: As an apprentice, your income might be lower than someone in full-time employment. This could affect how much you can borrow, as lenders typically evaluate your ability to repay your mortgage. However, your earning potential upon completing your apprenticeship may also be considered.
- Employment Stability: Lenders prefer applicants with stable employment. While an apprenticeship is a form of employment, its temporary nature may raise concerns for some lenders. However, your chances of securing a mortgage may improve if you demonstrate a clear career path and prospects for employment after completing the apprenticeship.
- Credit History: Your credit history plays a crucial role in mortgage applications. Lenders assess your financial behaviour, including your credit score, to determine your creditworthiness. While your credit history as an apprentice may be limited, responsible financial management during this time can positively impact your application.
- Deposit: Saving for a deposit is essential when applying for a mortgage. While apprentices may face financial constraints, accumulating a deposit demonstrates financial responsibility and can increase your chances of approval.
- Affordability and Affordability Assessment: Lenders typically conduct affordability assessments to ensure you can comfortably afford mortgage repayments. They consider your income, monthly expenses, and existing debts. As an apprentice, a detailed breakdown of your income, expenditure, and future earning potential can help strengthen your case.
Mortgage Options for Apprentices
Now that we have examined the factors to consider let’s explore the mortgage options available to apprentices:
- Help to Buy Scheme: The government-backed scheme, like the Help to Buy scheme, aims to assist first-time buyers in purchasing a property. This scheme often has specific criteria and requirements, so it’s worth researching whether you qualify as an apprentice.
- Specialist Mortgage Lenders: Some lenders specialise in providing mortgages to individuals in unique circumstances, such as apprentices. These lenders better understand the specific challenges apprentices face and may be more flexible in their eligibility criteria.
- Guarantor Mortgages: If you have a family member or close relative willing to act as a guarantor, you may be able to secure a mortgage with their support. A guarantor agrees to cover your mortgage repayments if you cannot meet them, assuring the lender.
- Shared Ownership: Shared ownership schemes allow you to purchase a share of a property while paying rent on the remaining portion. This option can be suitable for apprentices needing more financial means to buy a property outright.
Summary
Securing a mortgage on an apprenticeship is possible, but it comes with its own considerations and challenges. When applying for a mortgage on an apprenticeship, it’s crucial to research and understand your options. Be prepared to provide comprehensive information about your income, career prospects, and financial stability. Additionally, maintaining a good credit history and saving for a deposit will increase your chances of mortgage approval.