In the past few years, the rules for the provision of mortgage loans have become stricter. Mortgage lenders demand more securities. Prospective house buyers without a permanent employment contract are often not eligible for a mortgage loan. This also applies to PhD candidates who do their doctoral research within a university or university hospital. Because they do not have a permanent employment contract, many lenders regard them as flex workers. They are seen as risky because of the lack of certainty about their income. This is unjustified, as there are several reasons why a PhD candidate may be eligible for a home loan.
More options than you may think
We regularly provide advice to customers who want to buy a home while working on their doctoral research. Many of them are worried that they will not obtain any financing or only limited financing. Normally, PhD candidates do not meet mortgage lenders’ criteria for acceptance. However, lenders may deviate from this, provided that there are sound reasons for doing so. Often, there are more options than you might think. A lot depends on the preparation of the mortgage application. We understand the circumstances of PhD candidates, as well as the criteria that play a part in financing. Among other criteria, the following are important:
- the duration of the doctoral research
- a letter of intent, if any
- the PhD candidate’s prospects for the future in the labour market
Speed up the trend
We have noticed that the discussion about flexible employment contracts holds the attention of mortgage lenders as well. Permanent employment contracts have been decreasing for many years now, which is a sound reason for looking at criteria other than just the employment contract. Educational level and career perspective increasingly play a part, and this is a trend that benefits PhD candidates. However, the pace of change is not quick enough for us. We want to speed up the trend, be the driver of change. One of the ways we do this is by bringing the financial potential of the target group to the attention of lenders.
An important argument for lenders will be the great career prospects of PhD students. After completing their doctoral studies, PhD candidates quickly find a job – in or outside their area of research – which usually pays a good salary, especially in the case of medical or legal doctoral research. But PhD candidates in other areas have good prospects for the future as well. This is confirmed by recent scientific research carried out by Leiden University among PhD candidates who had obtained their doctoral degree. Of all university graduates, PhD candidates most often have paid work after their studies. A little over 2 per cent do not have a job after completing their training and doctoral studies, compared to an unemployment rate of nearly 8 per cent in the Dutch working population as a whole.
We know which mortgage providers include PhD candidates in their eligibility policy – there are currently eight who do so, around one in every three lenders. In fact, all lenders should have the proper knowledge to correctly assess a mortgage application by someone in this target group.
We do not just use our network to help PhD candidates obtain a suitable mortgage. Thanks to our many years of experience within this highly educated target group, we know what tips the balance when trying to obtain a mortgage. In practice, we see that banks have relatively little understanding of the circumstances of PhD candidates. To name an example: we regularly have to explain to acceptors what doctoral research actually is. We specialise in highly educated customers and regularly come across PhD candidates. Moreover, all our advisers are university graduates or have obtained a doctoral degree. This is why we can provide solid reasons why our customers should be eligible for taking out a mortgage loan.
PhD candidates come in all shapes and sizes
- Research fellow (Dutch aio): focuses on teaching in addition to carrying out research.
- Trainee research assistant (Dutch oio): usually predominantly focuses on research.
- Physician-researcher: researcher with a medical background and often also with clinical duties.
- Doctor of Philosophy (PhD): English name for someone who has obtained a doctoral degree.
We find that PhD candidates sometimes do not succeed in finding a loan for the purchase of their home. We think that this is a pity – and more than anything else, it is unnecessary. With the proper preparation, a suitable mortgage is within reach of a PhD candidate.
Want to know more about buying a home as a PhD candidate? Feel free to contact us without any obligation.
Sources and background information:
Statistics Netherlands (CBS) – current unemployment figures
Leiden University – study of career opportunities for PhD candidates