Teacher Mortgages – How to secure a great home loan
Applying for a mortgage can be a daunting experience. Whether you’re remortgaging, buying for the first time, or supplementing your teacher’s pay with a Buy To Let property.
You know it will demand time you haven’t got and effort you’ll need to muster to gather the information together to prove your reliability as a mortgage applicant.
While we’re all still living under the cloud of Covid-19, income and job stability is more important now than ever before when looking to secure a mortgage deal.
However, because your job is secure and you have a regular and reliable income, you already have the key to access most mortgages on the market.
Plus you can double your chances of securing a great mortgage deal by using a Mortgage Broker, or their appointed representative.
Provided they’re regulated by the Financial Conduct Authority (FCA), an authorised and regulated Mortgage Adviser like What Life and Mortgages will help you cherry-pick the most favourable lenders for residential and Buy to Let mortgages, as well as remortgages.
Here’s our guide to everything you need to know about mortgages for teachers and how to secure a great home loan. So what are you waiting for?
Do teachers get special mortgages?
Although there are no mortgage schemes designed specifically for teachers, because your income is steady and regular, your job alone will give you access to more favourable interest rates, fees and repayment flexibility.
From a lender’s viewpoint, when assessing a mortgage with a teacher as the applicant, it’s easy to build an accurate picture of how much you can afford now and in the future.
Provided you have a good credit score, you are a low-risk mortgage applicant. Even if you’re a newly qualified teacher, you’re in a strong position.
Another important instrument in your mortgage application toolkit is your teacher’s pension.
When you retire it will pay out a tax-free lump sum which you can use to pay off your mortgage if you haven’t repaid it by the end of the term, lowering a lender’s risk even further.
What if I’m a supply teacher?
A lender will need to establish that your income is regular to be sure you’ll be able to keep up repayments on your mortgage. To do that they will need to know how long you’ve worked in supply teaching, recent supply contracts and your teaching experience.
Do teacher mortgages differ for First Time Buyers, Buy-to-Let or remortgaging?
First Time Buyers
If you’re buying a residential property for the first time, the question most lenders will ask is, “how much deposit do you have”? Saving the deposit on your first home can be a sticking point for most First Time Buyers, especially if you’ve been renting.
If you have a good deposit – great! You should be able to secure a flexible mortgage with low fixed interest rates, fees and penalties.
If you haven’t – don’t worry! You may qualify for a 5% deposit loan (or 95% LTV mortgage) under the Government’s Mortgage Guarantee Scheme.
Aimed at helping those with low deposits to get onto the property ladder, provided the property you want to buy costs less than £600,000, and you have a good credit score, you could qualify.
You’ll be able to apply for the same Buy-to-Let mortgages as anyone else. However there are some criteria to be aware of:
- you need to own your own residential property either outright or with a mortgage
- you’ll need to prove an additional mortgage won’t over-burden you financially
- a good credit rating is essential
- you must earn more than £25,000 a year
It’s always worth shopping around for a better mortgage deal when your fixed rate comes to an end. Your secure teaching job, regular income and good repayment history will stand you in good stead with a new lender.
It’s always a good idea to use a Mortgage Broker, as we will know which lenders are offering the most favourable remortgage deals.
What help is available?
Government schemes include:
Starter Home Scheme
If you’re a First Time Buyer aged between 23 and 40 years old, and your total household income is less than £80,000 (£90,000 in London), you can apply for a starter home.
Right to Buy
You can buy your home at a discount if you’re a council tenant.
Right to Acquire
You can apply to buy your housing association home if you’ve had a public sector landlord for three years.
You can buy a share in a property owned by a housing association under the Government’s Help to Buy scheme.
Mortgage Protection Products
Your employment contract will include death in service benefit. However it’s not likely this will be enough to protect your family financially if you should die or be unable to work due to ill health or a terminal illness.
Your mortgage will be the largest loan you will have. Without property protection, you and your family will need to continue to pay it if your income stops, or risk repossession.
A Mortgage and Protection Broker like What Life and Mortgages will be able to help you choose the most appropriate Life Insurance and Critical Illness Cover.
How can What Life & Mortgages help me as a teacher?
As a teacher, you work long hours at school or at college, usually taking work home with you to work on long into the evening. You have precious little time to spare on anything else, other than family commitments.
When it comes to searching for a mortgage, it’s important to get it right. Having an experienced local Mortgage Broker working on your behalf is a gamechanger.
That’s why choosing What Life & Mortgages is a move in the right direction because we’ll handle everything for you including:
- Mortgage advice on the different types of home loans available
- Calculating how much you can borrow and the deposit you’ll need
- Identifying the mortgage lenders that will benefit you the most as a teacher
- Advice on which documents you’ll need
- Completing your mortgage application for you
- Submitting all the paperwork to your chosen lender
- Dealing with them on your behalf – while you’re busy teaching
- Frequent updates so you know your mortgage application is running smoothly
- Helping you choose the necessary insurances, such as life and critical illness cover