We know that foster carers can face some challenges getting a mortgage. Some mortgage advisers don’t understand fostering and how income can vary over time, which can affect the amount which can be borrowed and whether a mortgage is available at all.
Our partner, The Mortgage Brain, specialises in mortgages for foster carers. Together, we have answered some frequently asked questions about how fostering can affect your mortgage.
Absolutely! Some lenders will calculate how much you can borrow based on 100 per cent of your fostering income. The Mortgage Brain works with a range of lenders who will accept all your fostering income.
Be aware that high street lenders may base their calculations on your ‘net profit’, which is the amount you earn from fostering after deducting your foster care allowances. This will give you a figure for your income that is substantially lower than what you are actually paid, which will affect the amount you can borrow.
As a foster carer, you will need at least a five per cent deposit (i.e., a deposit of five per cent of the property's value). This is the same minimum deposit you would need as an employed or self-employed applicant.
Most high street lenders will expect you to have been fostering for at least six consecutive months before they will give you a mortgage. Some non-high-street lenders may accept three consecutive months of fostering, but this may result in less competitive (higher) interest rates.
Each lender will have their own requirements for how you demonstrate your income. But it’s likely that you will need remittance forms from your fostering service, rather than accounts. It’s always best to ask the lender what paperwork they need from you.
Yes. It doesn’t matter if you are a first-time buyer or already own a property, the right lender will consider fostering income like employment income. This means that 100 per cent of your income can be considered, even if you are a first-time buyer.
Yes, you can re-mortgage for many reasons, whether it’s to get a more competitive interest 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.
Yes, but you are likely to need a bigger deposit (at least 25 per cent) for a Buy-to-Let property.