Foster carers tell us that it can be difficult to get a mortgage because many mortgage advisers don’t understand fostering, your income and how it can vary depending on the placements you have.
We have pulled together some frequently asked questions about mortgages for foster carers, with the help of our partner The Mortgage Brain, who specialise in mortgages for foster carers.
Can I get a mortgage based on my income as a foster carer?
Absolutely! Some lenders will allow you to use 100 per cent of your fostering income. For example, The Mortgage Brain have a range of lenders that they currently work with who will definitely accept all your fostering income.
Be aware that high street lenders may ask for your net profit after deducting your foster care allowances, but this will result in an income figure substantially lower than what you are in receipt of.
What deposit will I need to buy a property?
As a foster carer, you will require a minimum five per cent deposit. This is the same minimum deposit you would require as an employed or self-employed applicant.
How long do I need to have been fostering for?
Most high street lenders will require you to have been fostering for a minimum of six consecutive months. However if you have been fostering for three months, some non-high street lenders will consider this also. Please be aware that this may result in less competitive interest rates though.
How do I evidence my income as a foster carer?
This will vary depending on the lender, however you will likely require remittance forms from your fostering service, rather than accounts.
As a first time buyer and a foster carer, can I use the Help to Buy scheme?
Yes. Fostering income can be considered in the same way as employed income with the right lender, meaning that 100 per cent of the income can be taken into consideration. This will allow you to purchase a new build property with as little as a 5 per cent deposit and further assistance from the Help to Buy scheme.
Can I re-mortgage my home?
Yes, you can re-mortgage whether it is to obtain a more competitive rate or because you want to raise capital for debt consolidation or home improvements. You will need to do this with a lender who accepts 100 per cent of your fostering income though.
What if I have bad credit?
Your fostering income can still be considered even if you have bad credit. There are a range of different options available to if you have bad credit, so do discuss this with a mortgage adviser.
Can I purchase a Buy-to-Let property as a foster carer?
Yes. However you will likely require at least a 25 per cent deposit for a Buy-to-Let property.
Our partners, The Mortgage Brain, understand the challenges you can face getting a mortgage as a foster carer and have years of experience helping foster carers to secure mortgages or to re-mortgage. They also offer members of The Fostering Network a discounted arrangement fee of £150 payable on application. Find out more about how to get in touch with The Mortgage Brain.