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Teacher Mortgages – What you need to know
For the vast majority of us, buying a house is the biggest financial investment that we make in our lives. You are going to want to make sure that you make the right decision the first time around. There is no such thing as a one-size fits all “perfect” mortgage out there. The best mortgage for you will depend on all sorts of individual and personal factors that are unique to you, your career and your lifestyle.
If you are a teacher, you may feel like you’re struggling to determine which kind of mortgage will best suit your needs. Let’s take a moment to run through absolutely everything you need to know about mortgages for teachers.
Suitable Mortgages for Teachers
Generally speaking, teachers don’t face major difficulties in securing a mortgage. Whenever a mortgage lender weighs up whether to give someone a mortgage or not, they’ll consider a variety of factors. One of these is your career. Lenders will want some confidence that the person will be able to pay the money back.
As most mortgages last around 25 years, most mortgage lenders will approve people who have a stable income in a stable role. At the end of the day, there’s always demand for teachers. Students always need an education and as long as you stay in this career path, chances are you’ll always have work available.
First Time Buyers
If you’re a first time buyer, you need to make sure you create an accurate budget. Many people dedicate way too large a proportion of their income to their mortgage. Remember that the outright cost of a house probably isn’t all you’re going to have to invest.
If you’re moving into an older property, you may have to carry out renovations and refurbishments. You need to get quotes for these costs on properties you’re interested in and incorporate these costs into your budget. Even if you’re moving into a new build, you’ll likely still have furnishing and decorating costs that you need to take into consideration.
If this is your first time living in your own property at all, you also need to make sure that you account for the cost of living. This can include utility bills, council tax, boiler servicing and other home repairs.
You may also need to account for changes in outgoings such as a change in your insurance premiums on car insurance, home insurance or contents insurance. These change area by area, so you will need to get quotes on these and add them to your budget too.
During your career, you may decide to remortgage your property. When you remortgage your property, you switch your mortgage to a different offer, or, more commonly, to a different provider. People tend to remortgage for a number of reasons. Perhaps you find a better offer. Maybe you find a better rate. You may remortgage to consolidate any debts you may have. It’s important to take various factors into account when remortgaging to ensure you’re definitely benefiting from the action.
First, you need to check what your new provider charges to remortgage with them. Many will charge valuation and solicitors fees, cancelling out the savings you may be benefiting from with a lower APR. Often, it’s best to see if your current provider will match the deal you’ve found. This way, you can benefit but save yourself the costs of remortgaging your property.
Buy to Let
If you’re considering buying a property to let it out for an extra source of income alongside teaching, it’s important to be fully aware of the responsibility, time and costs that becoming a buy to let landlord will entail. It’s not always a simple form of passive income. If you decide to go ahead with this, it’s also important to know that buy to let mortgages are slightly different to standard mortgages.
Whether your application is approved will often depend on the rent potential of your chosen property. Mortgage providers want to be sure that the rent generated from the property is anticipated to be sufficient to meet your agreed payments. You should also be prepared as buy to let mortgages have a slightly higher interest rate and a larger deposit is required – often 20 to 25% of the property’s total value.
Building an Accurate Picture of Affordability
Of course, teachers’ wages can vary significantly, so you need to make sure that you are looking for properties that fall within your bracket of affordability. Here’s some advice that will help different types of teachers to build an accurate picture of affordability.
Newly Qualified Teachers
When you first start out teaching, you may not be earning as much as you anticipate to earn in future years. Teaching is a pretty stable profession with easily predicted progression. Many mortgage providers will take this into account while assessing your application.
Supply teachers often work on a contract basis, which can often make applying for a mortgage more difficult, as this role can be seen as non-permanent. You may want to collaborate with specialists who understand your pay scale and circumstances for your best chances of being accepted.
Mortgage Protection Products
There are a number of different mortgage protection products available to teachers. Choosing the right ones for your needs is essential to ensure that you are safe and protected throughout the buying process. Some include:
- Life assurance
- Critical illness cover
- Income protection
- Accident, sickness and unemployment insurance
- Permanent health insurance
Each of these policies will help to protect you and your ownership of your home should you run into difficult situations or hard times.
How Can a Mortgage Broker Help If You Are a Teacher?
It’s recommended that all teachers work with a mortgage broker who understands the profession. They’ll know your individual circumstances and will be able to help you to secure the most suitable mortgage deal for you.