Can I get a mortgage as a foster carer?
As long as a foster carer meets a lender’s standard lending criteria, then in principle they can qualify for a mortgage. However, it should be noted that some lenders may apply extra checks to foster carers.
Therefore, this can scrutinise your income and personal circumstance in more detail before lenders agree to lend to you. This because they are not always open to understanding the perceived complexities of how a foster carer gets paid.
When trying to acquire a mortgage as a foster carer it is important to get the correct advice. This is so you’re able to secure the right mortgage rate and correct level of mortgage for your needs.
At IMC Mortgage Brokers, our advisors will work closely with you to understand your individual circumstance. Get in touch today to organise a free no-obligation consultation.
WHAT ARE THE MORTGAGE CRITERIA IF I‘M A FOSTER CARER?
Lenders will look at the standard things like your deposit size, credit history and property type. On top of this, they will also apply the following criteria when assessing a mortgage for a foster carer:
- They will want to know how long you’ve been a foster carer for. A minimum of 6 months as a foster carer is usually required.
- They may require evidence that your foster caring will continue for the foreseeable future. This is usually via a letter from your fostering agency or local authority.
- Any of your own children that live with you along with any children that are being fostered by you will be taken into account as your dependants when assessing your mortgage affordability.
- Most lenders will treat you as if you are self-employed. Therefore, they will calculate your income after the deduction of your carer’s allowance. This will then leave you with a ‘net profit’ which is then used to calculate your affordable mortgage amount.
When assessing your mortgage affordability, the deduction of your carer’s allowance can leave your income significantly lower than it actually is. This is one of the main issues most foster carers face when trying to apply for a mortgage. The reduction in income will most definitely lead to a reduction in the mortgage loan being offered.
You’ll be pleased to know that our mortgage advisors have access to lenders that understand the complexities and sensitive nature of being a foster carer.
With this in mind, they can help you find lenders that are willing to use all your foster carer’s allowance as assessable income, in turn increase your borrowing potential.
FINDING THE BEST MORTGAGE LENDERS AS A FOSTER CARER
The best mortgage lender for a foster carer will vary with every application, this is because every application is different. However, the lenders to look out for are those that are willing to use all your carer’s allowance as income when assessing your affordability.
While there are a few high street lenders that are willing to do this, most mortgage lenders that are right for foster carers are specialists.
The only trouble is that these specialist lenders don’t always advertise to the general public. Therefore, you will need to reach them through a broker or intermediary like us.
Our mortgage advisors work closely with a number of specialist mortgage lenders that will look at mortgages for foster carers. On top of this, these lenders will also include all the carer’s allowance as income. If you want to discuss your lending options, reach out today!
Foster carers mortgage rates
Your lender options can be limited if you are a foster carer. Therefore, your choice of products and interest rates will also be narrowed down. This can make it a bit of a challenge to secure the most competitive interest rates as a foster carer.
However, there are some steps you can take to put yourself in the best position to receive the most competitive rates.
One way to make yourself more attractive to lenders who offer competitive rates is by providing a larger than average deposit. By doing so a lender will not have to lend you as much, in turn making you a smaller lending risk and potentially offering lower interest rates.
Another factor you can look at is your credit history. Again, it’s all about risk, the less risky you seem to a lender, the better chance you have of obtaining a good rate.
One final step you can take is speaking to a mortgage broker as there are a number of benefits for doing so. One is that they will have access to specialist lenders that aren’t necessarily available to the public. Some of these specialist lenders will offer exclusive products tailored to those with more complex incomes like foster carers.
Another benefit of using a mortgage broker is that they will be able to work alongside you through the whole process, ensuring your application id presented in the best possible light.
