Foster carers provide amazing things for countless children in challenging situations. Among those amazing things, care, guidance, and a safe home environment prove paramount. Foster carers may need to take out a mortgage to support that safe home environment. However, much like foster caring itself, mortgages for foster carers present unique challenges.
Learning more about these mortgaging challenges puts you in a great place to find the best deal for you and your foster family.
Can Foster Carers Get a Mortgage?
As you’ll be relieved to hear, the short answer is ‘yes’. Like any deal, financial institutions loan mortgages to people who earn enough money to pay it back over time. Foster caring often brings in more than enough money for mortgage loan eligibility.
As a foster carer, you’ll need to plan all the typical elements of a mortgage. Such elements include mortgage terms, interest rates, and the size of your loan. These things depend on your financial history and the size of your deposit, like a conventional mortgage. The issue is, foster caring differs from conventional employment in crucial ways. These differences shape the divergences between foster carer mortgages and standard deals.
How Does a Foster Carer Mortgage Compare to a Standard Deal?
To compare a standard deal to a foster carer mortgage, you must first compare a foster carer to a salaried employee. Salaried employees know exactly how much they will earn year-on-year for the foreseeable future. Foster carers make a certain rate for each foster child, which may change as foster children leave, arrive, or grow to different ages. The fostering paradigm raises other unique issues, as foster children correspond to the household income while also depending on said income.
Like salaried employees, foster carers must prove they’ve been in their profession for some time, usually at least six months. Lenders often require evidence from agencies and local authorities that a foster carer is likely to continue in their profession for some time after the deal too.
Lenders love predictability, as it helps them assess affordability. The perceived unpredictability of foster caring creates obstacles between foster carers and many mortgage deals.
What Obstacles Might Foster Carers Face When Applying For a Mortgage?
When lenders calculate income for salaried employees, they account for the whole annual paycheck. Many lenders take a different approach to foster carers. Even if you work for an agency, they may well treat you as self-employed. Most lenders calculate a foster carer’s income differently from a salaried worker’s.
Lenders tend to estimate the cost of raising each foster child, then subtract that from a carer’s annual income. The resulting ‘net profit’, often fairly small compared with a conventional salary calculation, limits a foster carer’s options. They may face higher rates, longer terms, and even outright rejection. Ultimately, mainstream lenders may not understand the ins and outs of foster caring well enough to provide an appropriate deal.
How to Find the Right Foster Carer Mortgage?
As property professionals, mortgage brokers can help foster carers find a specialised lender to suit their situation. Experienced brokers will have access to lenders with the right experience, in their network of financial experts. Specialised lenders let foster carers use remittance slips to support their applications, instead of or alongside bank balances, in a way that mainstream lenders won’t.
Comparing lenders and finding one who accounts for a foster carer’s full income creates an effective route to a suitable deal.
How to Get a Mortgage as a Foster Carer
Getting a professional on your side, such as an experienced mortgage broker, can make it easier to secure a great foster carer mortgage. They’ll talk you through the requirements, the obstacles, and the pros and cons of each deal until you find one that suits you and your foster family best.