Police Mortgages – is it easy to find a good deal?
There are lots of unique aspects to life in the police force, and you might wonder if that makes it more difficult to get a mortgage. The good news is that many lenders will welcome police officers as customers and you should be able to find a competitive deal.
What is a Police Mortgage?
There aren’t any unique products purely for members of the police force, so a Police Mortgage is just a way of describing how someone in your line of work finds a mortgage deal.
It can be helpful to seek out specialist lenders if you’re in the police, as some are more sympathetic to shift working, overtime, variable income and other factors that apply to your career. A good mortgage advisor will be able to identify the most appropriate lenders and products to suit you.
How much can I borrow?
The amount you can borrow is usually linked to your annual income. Many lenders will offer 4.5 to 5 times your earnings – but you may find you can borrow more. Some mortgage companies feel your career in the police makes you highly employable as well as a responsible borrower.
You will also need at least a 5% deposit. If you can put down more than this towards the property, you will find more available mortgage deals and lower interest rates, which will reduce the monthly repayments on your mortgage.
Mortgage lenders will also check your credit score as part of the application. Small credit blips aren’t usually an issue, but more serious, bad credit issues can make it more difficult to get a loan.
Will overtime or a second income count?
Many police officers gain a proportion of their earnings from overtime, or you may be a part-time worker with a second income. Often a high street lender will limit the amount of income they will allow this way, but if it makes a big difference to your borrowing, it’s worth seeking out more specialist lenders.
What help is available?
There are a number of government schemes that might help you buy a home. These aren’t purely targeted at police mortgage applicants – they are open to everyone.
Help to Buy
The Help to Buy Equity Loan is a scheme to boost your deposit with an interest-free loan. It’s open to First Time Buyers on new build homes. If you have a 5% deposit the government will loan you a further 20%, taking the deposit to 25%. You then take out a mortgage for the remaining 75%.
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Shared Equity Schemes
Some developers offer shared equity schemes, which are similar to the Equity Loan scheme above. They involve taking out a loan from the developer to boost your deposit, and again you only need 5% up front.
With Shared Ownership you can part-rent, part-buy a home from a developer or housing association. Shares start at 10% and you can ‘staircase’ your share over time up to 100% ownership. You will need to apply for a mortgage to buy your share.
Right to Buy/Right to Acquire
If you’ve rented a council property for more than three years you have the Right to Buy – where you can get a discount on buying a council home. The size of the discount increases over time. With a Housing Association you gain the Right to Acquire in a similar way, although the discounts are usually lower.
Starter Home Scheme
The government announced a starter home scheme a few years ago, promising a 20% discount on new build homes for young home buyers. As yet there have been no further developments on this scheme.
How can a Mortgage Broker help?
Mortgage Advisers can be a great help in finding you a suitable deal. We spend time getting to know you and exploring your personal information. Then we assess the lenders most likely to have suitable mortgages.
We’ll compare rates, fees and criteria to recommend the most relevant deals, plus we will manage the application process too. If other financial products are likely to be useful we can explore these with you. We do charge a fee at the point of mortgage approval – all costs and details will be clearly discussed with you at every step.
Purely Financial Planning LTD is an appointed representative of mortgage brokers PRIMIS Mortgage Network. PRIMIS Mortgage Network is a trading style of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority.