Can Foster Carers Get a Mortgage?
Yes, foster carers can get a mortgage. However, some lenders might not fully understand the income structure and allowances that come with fostering. It’s essential to work with a mortgage broker who is familiar with fostering income to match you with a suitable mortgage lender.
Foster Care Income and Mortgage Eligibility
Foster care income can be used to secure a mortgage, but not all lenders consider it. Each lender treats foster carers differently, and some may not take your income from fostering into account when determining how much they will lend you. It’s crucial to find a lender that understands your income as a foster carer.
How Lenders Treat Foster Carers Differently
Lenders vary in how they treat foster carers:
- Some lenders do not consider fostering income at all and might still reduce the amount they are willing to lend by counting foster children as dependents.
- Others treat foster income like self-employed income, requiring at least two years of tax calculations and considering only a fraction of your total allowance.
- A few foster-friendly lenders base their considerations on the last six months of your income from fostering.
Best Mortgage Lenders for Foster Carers
The best mortgage lender for foster carers will depend on your unique circumstances. Some foster carers may find a suitable mortgage without needing a lender that considers their fostering income. Others might need a lender that accounts for all or just a portion of their foster allowance. Speaking to a mortgage advisor experienced with fostering can help save time and ensure you get a competitive rate.
Interest Rates for Foster Carers
Foster carers aren’t necessarily subject to higher interest rates. Some lenders treat foster carers like any other borrower, as long as they can prove your mortgage affordability. Working with a mortgage broker experienced in fostering can help match you with a lender that considers enough of your fostering income to secure the best rate possible.
Mortgage Eligibility and Fostering Duration
Some lenders require that you’ve been fostering for at least six months to consider your foster income. Unfortunately, most high-street lenders expect you to have been fostering for two years before they consider your foster allowance. You’ll need a letter from your local authority or fostering agency to verify your income during this period.
Deposit Requirements for Foster Carer Mortgages
Foster carers need the same deposit as any other borrower. The minimum deposit is typically 5%, but larger deposits may grant you access to more and cheaper mortgage options. For buy-to-let mortgages, you’ll usually need a 25% deposit, which you might be able to raise by mortgaging your current home.
Providing Evidence of Foster Income
Lenders may have different requirements for evidence of foster income. Some may ask for two years of tax calculations and tax year overviews, treating you as self-employed. Others might require a letter from your local authority or fostering agency to verify your income. The most foster-friendly lenders may only ask for your last six months of remittance slips.
How Much Can a Foster Carer Borrow?
The amount a foster carer can borrow varies significantly between lenders. The best way to determine your borrowing potential is to consult a broker who understands income from fostering and allowances. They can help match you with a lender that maximises your borrowing capacity based on your specific circumstances.
Understanding Foster Carer Income Mortgage Calculation
Mortgage providers have different approaches to foster carer income when assessing affordability. Some may not include it at all, others might factor in a capped percentage, and a few may consider 100% of it. Additionally, lenders might only include a portion of other income sources, such as self-employed work or benefits. That’s why it’s essential to find a lender that understands your unique circumstances as a foster carer.
Choosing a lender that does not consider foster carer income or only includes a capped percentage can negatively affect your borrowing capacity. Mortgage providers typically use income multiples to calculate the maximum amount you can borrow, multiplying your eligible income by a factor of four to five.
For instance, let’s say your total household income consists of a £30,000 salary and £22,000 of foster carer income:
- Without foster carer income, you could typically borrow up to £135,000 (£30k x 4.5)
- With foster income included, your borrowing capacity could increase to £234,000 (£52k x 4.5)
| Income Source | Income Amount | Standard Lender | Foster-Friendly Lender |
|---|---|---|---|
| Salary | £30,000 | £135,000 (30k x 4.5) | £135,000 (30k x 4.5) |
| Foster Carer Income | £22,000 | N/A | £99,000 (22k x 4.5) |
| Total Income | £52,000 | £234,000 (52k x 4.5) | £234,000 (52k x 4.5) |
This table shows the impact of including foster carer income when calculating your borrowing capacity. Without considering the foster carer’s income, you could borrow up to £135,000. However, when the foster carer income is included, your borrowing capacity increases to £234,000. Keep in mind that these numbers are just examples and may vary depending on the lender and your individual circumstances.
You can use the example below to estimate your potential borrowing capacity based on your income:
Mortgage affordability calculator
Please note that this calculator provides an estimate and should not be considered a guarantee of your borrowing capacity. Consult with a broker who understands fostering income to help you find the most suitable lender and mortgage product based on your specific circumstances.
For a more detailed and personalised mortgage affordability, use our Mortgage Affordability Calculator here >
How a Mortgage Broker Can Help You Achieve a Mortgage with Foster Carer Income
A broker experienced in working with foster carers can be invaluable in helping you secure a mortgage based on your unique income situation. They can:
- Understand your income structure: A specialist broker knows the ins and outs of fostering income, including allowances and other sources, ensuring an accurate representation of your financial situation.
- Match you with suitable lenders: They have knowledge of lenders who consider income from fostering and can identify the best options for your specific needs.
- Save time and effort: A broker can streamline the mortgage application process by gathering and submitting the necessary documentation on your behalf.
- Negotiate competitive rates: Mortgage brokers can leverage their relationships with lenders to secure favourable interest rates and terms for your mortgage.
- Provide personalised advice: They can guide you through the entire mortgage process, offering tailored recommendations to improve your chances of approval.
Working with a broker experienced in fostering income can make the mortgage smoother and increase your chances of obtaining a mortgage that suits your needs as a foster carer.
Success Story: How I helped my foster carer clients get the mortgage they wanted
We sat down together and went through their financial situation in detail. I took the time to understand their goals and concerns, and we quickly built a strong rapport, making the process much more enjoyable. After carefully evaluating their circumstances, I identified a foster-friendly lender who would consider their income from fostering in the mortgage affordability calculations.
With my support, the couple successfully secured a mortgage that met their needs, allowing them to purchase a larger home for their growing family. It was an incredibly rewarding experience to help them overcome the challenges they faced and see how much difference this made to the whole family."
Mortgages for Foster Carers with Bad Credit
Yes, some lenders will consider foster carers with bad credit. However, the options might be more limited, and you may face higher interest rates. It’s essential to work with a broker who specialises in bad credit cases and is familiar with fostering income. They can help identify the most suitable lenders for your situation.
Government Assistance for Foster Carers
Foster carers may be eligible for various government assistance programs, such as the Help-to-Buy Scheme or Shared Ownership if they meet the specific requirements of each program. Consult foster carer mortgage specialists to explore what options are available to you based on your circumstances.
Remortgaging as a Foster Carer
Foster carers can remortgage their homes to access better interest rates, consolidate debt, or fund home improvements like adding an extra bedroom. Ensure that the lender you choose for your remortgage is aware of and understands your foster income, as this may impact your affordability assessment.
Tips for Foster Carers Seeking a Mortgage
- Consult a mortgage broker: Speak to a broker experienced in fostering income to help you find a suitable lender and mortgage product.
- Improve your credit score: Take steps to improve your credit score before applying for a mortgage, such as paying down debts and ensuring you’re on the electoral register.
- Save for a larger deposit: A larger deposit may provide access to more mortgage options and better interest rates.
- Keep accurate financial records: Maintain thorough documentation of your income from fostering, as well as any other sources of income and expenses.
Conclusion
Securing foster carers mortgages can be challenging, but with the right guidance and persistence, it’s possible. By working with a mortgage broker experienced in fostering income, keeping accurate financial records, and following the tips outlined in this guide, you can increase your chances of obtaining a mortgage.
Our team are experts at getting mortgages for professionals such as teachers, police, NHS staff, accountants, foster careers and more.
FAQs
Can I get a mortgage being a foster carer?
Yes, you can get a mortgage as a foster carer. However, it's essential to work with a broker familiar with fostering income, as not all lenders understand the unique income structure and allowances that come with fostering. A broker can help match you with a suitable lender.
Can I get a mortgage on fostering income?
Yes, you can get a mortgage using income from fostering, but not all lenders consider it. Some may only consider a portion of your foster allowance or require at least two years of tax calculations. It's crucial to find a lender that understands your income as a foster carer.
Can I get a mortgage if I get carers allowance?
Yes, you can get a mortgage if you receive a carers allowance, but lenders may treat it differently. Some lenders may consider the full amount or a percentage of your carers allowance as eligible income. Consult a broker to find a lender that is sympathetic to your circumstances.
Does foster income count for a mortgage?
Foster income can count towards a mortgage, but not all lenders consider it, and some may only include a portion of it. The best approach is to work with a broker experienced in fostering income to match you with high street lenders as well as specialist mortgage lenders that fully understands your financial situation as a foster carer.
