Obtaining a mortgage as a foster carer
Throughout my career I have worked with multiple foster carers who have all expressed their frustration at the complexities involved with obtaining a mortgage.
This stems from a reduced number of mortgage providers accepting foster income, advisors not understanding your circumstances and having a lack of experience within this very specific area of mortgages.
My job, as a specialist in foster carer mortgages, is to work with you to fully understand your current situation and future goals. Having truly got to know your circumstances then I search the whole of the market and recommend a mortgage lender that will help you achieve your goals.
My focus is on helping guide you through the whole house buying or remortgaging process, and not simply to just look at the mortgage. From our first discussion to your mortgage completing and you picking up the keys, I will be with you every step of your journey.
As part of our discussions, we will also talk about the risks involved with taking on a large financial commitment in your mortgage, and where applicable I will provide recommendations for solutions to those risks.
Can I get a mortgage if my income is purely from fostering?
Absolutely! Whilst the number of mortgage lenders available to choose from will be reduced, with access to the whole of the market I will be able to find a provider who will consider your application if the only income is from fostering.
I have been fostering for less than a year, can I still get a mortgage?
The length of time you have been fostering in itself will not stop you from obtaining a mortgage. It will however likely reduce the number of options available. Lenders may well ask for more evidence of income at the point of application and may in certain circumstances request a letter from the local authority.
I am not registered as self employed; can I still use my foster income?
As you do not need to fill in tax returns unless you exceed the qualifying amounts, which can be confirmed here, you may still be able to include your foster income as part of your application. In place of SA302s lenders will usually seek a letter from your local authority confirming two years income, this will then be cross referenced to your latest three months bank statements.
What do I need as evidence of my income?
This will vary depending on the lender, but as a general rule of thumb most lenders currently ask for a letter from the local authority detailing your previous income, and confirmation this is likely to continue. The more evidence you have however the easier it will be for a mortgage lender to confirm your affordability, and so where possible it is always advisable to retain remittance slips and have copies of bank statements available.
As a foster carer do I need a bigger deposit?
The size of deposit required is not directly linked to the source of your income. The size of deposit required will be based on the mortgage lenders available products at the time you are ready to apply. As the pool of lenders to choose from is smaller, this may mean a bigger deposit is required to meet their product range requirement.
I am eligible to receive means tested benefits, can I include this?
There are a range of means tested benefits you may be eligible to claim for. As foster allowance is not classed as income, when calculating eligibility, you could qualify for Child Tax Credit, Housing and Council Tax Benefit, Working Tax Credit, Carer’s Allowance, Job Seeker’s Allowance and Income support.
Not all of these can be included as part of your mortgage application, and some lenders will disregard them. There are however lenders that will factor some, such as child tax credit and working tax credit into their affordability calculations.
Can I still use schemes such as help to buy and first home fund?
Absolutely. These schemes are all designed to help support people onto the housing market, and fostering does not exclude you from applying to these schemes.
Do I need to use a mortgage broker to get a mortgage as a foster carer?
Absolutely not. If you have done your research and feel comfortable with the process then you can apply direct to the mortgage lender. Lots of clients have however told me they found it beneficial using a broker to navigate through the various mortgage lender’s policies and criteria to find a provider that would help them achieve their goals.