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Michael Webb talks us through the mortgage process for teachers.
In less than 20 minutes, you’ll know a lot more about Teacher Mortgages.
Are there specific mortgages tailored to teachers?
There are no specific mortgages tailored for teachers. But there is actually a teachers’ building society that has criteria geared up towards teachers and their contracts – although they don’t just lend to teachers.
While there’s no such thing as a specific teacher’s mortgage, some of the criteria from certain lenders will be very good for teachers and how your contracts work.
Is it easier to get a mortgage as a teacher?
There are lots of things that factor into whether you can get a mortgage. One of those is the type of employment you have, and teachers are very secure in their jobs. It’s very difficult to lose your job as a teacher without doing something criminal.
That security of employment is something that lenders recognise, along with teachers’ pay scales and increases in salary. So having secure employment will help you get a mortgage.
But whether it’s easy to get a mortgage or not also comes down to an individual’s credit conduct, what deposit is available, and whether they have various loans, car finance and credit card debt.
So more goes into making up the picture of whether it’s easy to get a mortgage, but the employment element is definitely a good tick in the box.
Are there differences for teachers who are First Time Buyers, Home Movers, Remortgaging or getting a Buy to Let mortgage?
Not really, other than when there’s criteria around key workers, as teachers would fall into that category. Some shared ownership schemes are only available to key workers in a certain geography – a teacher would most definitely tick those boxes. They would be high up the list of people in that selection process.
With supply teachers, it would depend on your track record of supply teaching and how regularly you work. You will have a stronger case if you take a role for, say, six weeks and immediately go somewhere else within the same local authority area.
We have helped plenty of supply teachers and newly qualified teachers to get a mortgage. Like many public sector roles, you will be on probation contracts to start with, but that’s usually not much of an issue for a teacher.
The other thing that we can also look at is that teachers taking a new role in September will tend to get their contracts in June. With some lenders, as long as that contract is due to start within the next three months you can use it to apply for a mortgage. This works very well for teachers that are taking roles that require relocation.
That’s something that we’ve helped many teachers with over the years. Lenders are happy as the contract is coming from a local authority. You could technically be moved into your home before you’ve actually started your job.
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How much can teachers borrow for a mortgage?
Your salary will just go into the usual income calculators. How much you can borrow will depend on what income multiples and what factors are at play – are there debts, credit cards, loans, car finance? Are there dependent children or adults? How many people are on the mortgage?
A teacher would qualify under professional criteria with some lenders, which means you might be able to get enhanced income multiples of five, 5.5 times your salary. So there are options there, but it’s difficult to give a definitive answer.
The one thing I would say to any teacher looking to get a mortgage is to speak to a mortgage broker. We can go through your individual situation and work out specifically how much you would be able to borrow.
What help is available for teachers to buy a home?
Again teachers fall into the professional category, which can help boost borrowing as we just discussed. Also, depending on the ever-changing criteria, teachers are key workers. So there may be relevant key worker products or key worker-only shared ownership schemes.
The Teachers Building Society puts out deals specifically for teachers. They do work with anyone, but generally their criteria leans towards professionals and teachers. They might require a teacher to put down a smaller deposit than someone else, for example.
This criteria is always fluid so offers can drop in and out of the market depending on the lender’s appetite for risk.
What mortgage protection products are available for teachers?
All the same products are available. When we’re looking at Mortgage Protection we need to look at the employment that the individual is doing. We would look at our things like life insurance for teachers – and you may have some death in service benefits. So we need to factor that into whether a particular life insurance for the teacher is needed.
Critical illness policies for teachers are the same – there may be some employment benefits, but typically we need to look at something specific to cover the mortgage.
With income protection, many teachers will probably have quite good sick pay arrangements. So we would look at income protection policies in line with what benefits the teachers have.
As a teacher you’re probably quite well looked after compared with the wider market, which means your mortgage protection products could potentially be a bit cheaper for you. That’s the main consideration when we’re looking at mortgage protection for teachers.
How can a mortgage broker help a teacher looking for a mortgage?
As a teacher, you’re working Monday to Friday. So mortgage brokers will typically work around your work schedule – we’ll be available on weekends and in the evening.
We will be able to assess your situation: your income, outgoings, other commitments and dependants to work out how much you can borrow. Then we’ll make the most appropriate recommendation for your situation. It’s much better than trying to work your way through it yourself and hope that you come out with the right result.
Your home may be repossessed if you do not keep up with your mortgage repayments.