Police Mortgages - What you need to know
What is a Police mortgage?
Unfortunately, there is no such thing as a police mortgage, the same mortgage options that everyone else can access are out there for police officers too. There are however specialist lenders who can be worth approaching as they understand more about your career – the pressures and shift changes and understanding your needs of serving and pension schemes if you are retired.
What help is available?
There are a number of government schemes that you can apply for to help you onto the property ladder. Schemes such as Help to Buy, Right to Buy and Shared Ownership and more are all available.
Help to Buy
The government will match a 5% deposit with another 20% to put towards your property deposit. It is in the form of a loan and it is interest-free for the first five years. It runs from December until the 31st of March 2023.
Right to Buy
The amount you can borrow will depend on the amount of rental income you can achieve which in turn will be influenced by the property itself and the local rental market. In normal circumstances, lenders will want your rental income to be 25-30% higher than your mortgage payments, so the more you can charge in rent the more you will be able to borrow.
To find out about the rental market in your chosen area check local press and websites and windows of letting and estate agents. You may also find an online buy-to-let mortgage calculator useful.
If you cannot afford to buy a property outright, you can afford to pay between 25-75% of the property purchase price, you can opt for Shared Ownership. You will pay a reduced rent on the portion of the property that you do not own until you can afford to purchase the remainder of the property outright.
Starter Home Schemes
There is a new scheme in which 200,000 new build homes will be up for grabs to first time buyers with at least 20% off the valued market price. You must be under forty to take part in this scheme.
You must ensure your credit is in check before approaching a mortgage lender as they will look into your credit history. You should seek help from a mortgage broker to ensure that you are picking the right lender for you as already mentioned there are lenders who specialise in your career as a police officer.
How much can I borrow as a Police Officer?
You will be able to access up to five times your annual salary if you have a good credit history. You will be deemed a low-risk borrower in terms of your occupation as a police officer is a well-recognised and stable career position to have.
As a police officer who has been in the force for a long amount of time lenders will favour you and can often offer you better mortgage products to try and entice you to pick them.
If you do happen to have bad credit or a mark on your credit score but can explain it then lenders can be flexible so long as you approach them with this information first. You might need to seek a specialist lender which sounds daunting but with the help of a Mortgage Broker, they can be easy to find.
How much of a deposit will I need?
If you are settled in your career as a police officer and this is evident then you will be able to access properties with only a 5% deposit. This is subject to lenders and your credit rating. The market standard deposit is 10% of the property’s purchase price.
You should try and approach lenders with as much of a deposit as you can as this will maximise your chances of being accepted and can sometimes even get you better rates. It is important to know that if you miss repayments on your mortgage your home may be repossessed so ensure you can afford the mortgage you are applying for.
Will a mortgage lender take into account a second job or overtime?
There are lenders out there who will count second jobs, overtime and even bonuses into your mortgage loan calculation but they are likely to be specialists. If there are specific sources of income that you want to be taken into account, you should approach a mortgage broker to advise you on a lender that would be willing to consider them.
You need to make sure you have at least three months’ worth of accounts to prove your income if you want a lender to take into account regular overtime or a second job. Combining your PAYE salary and extra income can mean that you can access more expensive properties and potentially borrow more.
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