Can I get a mortgage if I'm a Foster Carer?
Great News for Foster Carers!
Here at Robin Mortgage Design, we love to help people with all kinds of careers and vocations to achieve their property dreams. This includes our wonderful clients who have chosen to become Foster Carers!
Does that mean I could get a mortgage based on my income as a foster carer?
We hear you ask – and we’re happy to say - Absolutely!
Fostering a child for some people is a full-time job and for some who offer part time or Respite Care, it is an income boost – either way, like most jobs - it pays. As long you are declaring it through the right channels, then you can definitely use it as income when applying for a mortgage - so much so that some lenders will allow you to use 100 per cent of your fostering income even its your only income.
There are a couple of important things to be aware of though. This income is treated as Self Employed, which means you need declare it through HMRC - which you might be using an accountant for. It is also important to know that some lenders will only class the income you have left after expenses as your income, which can, in some cases, considerably lower the level of borrowing you can achieve.
What deposit will I need to buy a property?
Well now this is a good question. You will typically need a minimum of 5% of the property value. For example - if you’re buying for £200,000 then you would need at least £10,000 to put down. This could be from savings, investments or family gifts, but if you’re unsure, always seek advice. This is also a good time to point out that in addition to your deposit, you will need to keep money aside to pay for legal fees, stamp duty and mortgage application fees. You might also want to consider the cost of a valuation and other moving expenses, which can all range from £2000 onwards depending on your property value.
How long do I need to have been fostering for before I can get a mortgage?
Most commonly you need to have at least 1 or 2 years track record, especially if this your sole source of income, however you might be able to use this income after a matter of months, although this would typically be if it is a secondary income or by lender discretion.
How do I evidence my income as a foster carer?
This will vary depending on the lender that best suits your needs at the time, however, you will likely be required to supply remittance forms from your fostering service and or Tax Calculations and Tax years Overviews provided by your accountant or HMRC. You may also be required to show your bank statements.
As a first-time buyer and a foster carer, can I use the Help to Buy scheme?
Of course you can! The help to Buy Scheme recently changed so that only first-time buyers can take advantage of the equity loan when applying for a new build. Help to buy is a great product, but like all things it does have its pros and cons, so be sure to read up on the scheme and how it works. Why not follow this quick link to our Help to Buy blog to find out more.
Can I re-mortgage my home as foster carer?
Well, this depends on why you are considering a re-mortgage. We have established that the income can be used, so it depends on what the funds are to be used for. Generally speaking we can find solutions for most things, however certain lenders have a set of list of acceptable reasons for capital raising, such as home improvements and consolidate of debts which they prefer to adhere to.
Can I purchase a Buy-to-Let property as a foster carer?
We would like to think so! Buy to Lets are treated differently to a residential mortgages, so you would typically need a larger deposit of around 25% or more of the property value, and then affordability is based on the predicted rental income. This means your income and outgoings in most cases can be ignored. Make sure you seek advice before committing to a buy to let, as this can affect your tax status.
We hope this short article gives you hope as a Foster Carer and if you would like to discuss your options with a friendly, professional human being, then our team at Robin Mortgage Design would be happy to help. Just give us a call on 0333 242 3863 or visit our contact us page.
Good Luck with your mortgage!
Written by Mark Travell, Director of Robin Mortgage Design
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