Mortgage Advice for Teachers
As with many other professionals and key workers, teachers and others working in the education sector often have mixed experiences in trying to get a mortgage. On the one hand, they can be well paid with strong career prospects. On the other, the specific nature of their employment – for example, temporary contracts or supply work – may make some lenders more reluctant to approve mortgage applications.
The good news is that there are plenty of positive mortgage options out there for teaching professionals, and by working with a mortgage broker that has access to products from across the UK mortgage market, you are more likely to get the deal that best suits your unique circumstances.
Mortgage options for teachers
Most lenders don’t offer mortgage products specifically designed for those in teaching professions. Some do, however, and there are even lenders who specialise in lending to teachers, lecturers, teaching assistants and others working in the education sector. It’s worth noting that many of the lenders who offer such products are smaller, more niche lenders, who are often able to offer more specialised lending products than most high-street banks and building societies.
For some lenders, mortgage applications from those not in regular, salaried employment can present problems when it comes to assessing mortgage affordability. For those on short-term or temporary contracts, or those who work primarily as supply teachers, this can sometimes be an issue. However, some lenders recognise that teachers and other education professionals often represent a lower risk than other types of borrower, and take this into account when assessing applications. As a teaching professional, you may even be able to borrow more, or qualify for more advantageous mortgage deals, than other borrowers.
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Newly qualified teachers and supply teachers
Newly qualified teachers often start on a temporary (often one-year) contract. While this may be problematic for some lenders in terms of assessing your ability to afford the mortgage repayments on a long-term basis, more specialist lenders will take account of this increasingly common practice, and assess your mortgage application on the same basis as a teacher on a permanent contract. In fact, some lenders even offer mortgage products specifically designed for newly qualified teachers.
The situation is similar for supply teachers. Although more mainstream lenders may find the absence of permanent, fixed income problematic, more specialised lenders will look at the totality of your employment history and income to inform a common-sense judgement on your ability to repay. In the cases of both newly qualified teachers and supply teachers, sympathetic lenders often assess affordability on a case-by-case basis, rather than simply relying on a standard calculation.
How much can a teacher borrow?
In the past few years, mortgage assessment criteria has got tougher, as lenders now have a greater regulatory responsibility to prove that the borrower has the ability to meet the mortgage repayments on an ongoing basis. This means that it’s no longer as simple as being able to borrow, for example, five times your annual salary.
The lender will look at your income as well as your outgoings – such as existing credit commitments – to work out how much you will be able to borrow. Different lenders may use slightly different criteria in working out how much you can afford, either including or excluding factors such as regular overtime, bonuses or secondary sources of income.
The maximum amount you can borrow will also be limited by the lender and the mortgage product’s loan-to-value (LTV) limit. Some lenders will allow you to borrow up to 95% of the value of the property, but many restrict lending to a lower amount such as 90% or 85%. It’s also worth noting that putting down a bigger deposit may give you access to more preferable mortgage deals.
By dealing with a mortgage broker that has access to deals from across the mortgage market, and not just the big mainstream lenders, you’re more likely to find both a lender that welcomes mortgage applications from teaching professionals, and a product that is suited your circumstances. Call Just Mortgage Brokers today to discuss how we can help find the lender, and the mortgage, that’s right for you.