Often the question arises because we’re planning a change- either work-related or housing-related or both. Perhaps moving from supply to perm, or perm to supply or we’ve been offered a fixed term or longer term open-ended contract - and we’re wondering if this is a good or bad move for us financially.
The short answer to the question is that ‘it depends’. In general terms, those having started supply recently may find it harder than someone with longer supply teaching tenure. Deposit size, credit status, provable income, and personal overheads are some of the many factors that lenders will consider when assessing or underwriting supply teacher mortgages.
For many, obtaining a supply teacher mortgage is likely to require the assistance of an experienced mortgage specialist. Many mortgage specialists, or mortgage brokers, as they are usually known, may charge a broker or fee to provide advice. They may offer advice based upon the whole of the market, or a sufficiently wide enough spread of lenders to be considered ‘independent’, or they may work from a discrete panel of lenders. Just as choosing a lender directly is not easy, choosing a broker can also feel quite daunting.
With this in mind, we’ve teamed up with Tembo, a specialist mortgage broker service, to help answer some of the big questions. Neither Airsupply nor Tembo is providing advice or making any specific recommendations in this article, everyone’s circumstances are different. It’s also worth knowing that Tembo is happy to reduce its standard advice fee for Airsupply teachers. Tembo are a friendly bunch, and will be happy to answer any specific questions you may have, so don’t hesitate to check them out!
A large number of lenders will require you to be in full time employment, or to be able to produce several years of self-employed earnings. However, as more and more workers across our economy are on zero-hours contracts lenders are adjusting their criteria.
Some lenders may consider an average of the last 12 months' earnings for example. Others may need a two-year average. Whilst others may take your latest 2 or 3 P60s amongst other documents to assess your level of ‘affordability’. At the other end of the scale, some lenders can ‘extrapolate’ earnings based on say an average of 6 most recent payslips to estimate your annual income.
Because of the additional risk (as the lender may see it), deposit sizes may be under consideration and also the income multiplier used to calculate your maximum borrowing levels may be lowered.
Taking all of the above into account it’s best to gain advice specific to your individual circumstances. In broad terms, a longer record of earnings, and a suitable deposit will help.
Very few lenders will extrapolate earnings to establish future income, some will calculate an average based on the last 12 months payslips. Most lenders offering supply teacher mortgages lenders will prefer to average out your income based on several years of proven income. Those that have been teaching supply for longer are likely to have more options.
A guarantor may be helpful in a variety of circumstances. Specialist mortgage advisors may suggest this in some circumstances.
Proof of ID, usually a passport and/or driver's licence
Evidence of national insurance number
Proof of current address, - recent, utility bills, tax correspondence, or bank statements are often requested
Earnings-related documents - P60s, payslips
Proof of rent or mortgage payments
Proof of deposit may also be requested
Bank statements - and an explanation for any regular outgoings, especially any that will still apply once a mortgage is taken up
As this is still not a permanent contract many of the same considerations arise from an underwriter's perspective. Of course, having that stability will enable a consistent volume of payslips from which your income may be determined.
Often yes, lenders will include either all or a proportion of your additional income derived from several sources. Lenders offering mortgages to supply teachers will vary on what they can accept - investment income, pensions and second jobs are likely to be included across several lenders. Some may accept all of the additional income, some factor it down to half, and some may be more conservative.
With some lenders, yes - Many lenders base earnings using an average, so this will tend to help in these cases. Of course, an underwriter may query or question whether your new levels of pay are more typical and base a decision on your current affordability.
Almost certainly a permanent teaching position will help obtain a mortgage, once you’re beyond the end of any probation period. You may also qualify for teacher-specific or union-based mortgage deals reserved for key workers in education. However, the level of your new income may be more or less than your previous income so this may have some bearing on the amount you can borrow.
Changing your role from supply to perm during the period of application, or during the period from initial approval to moving in may mean an existing approved application might need reassessing. Potentially the decision may differ from the original application.
If you are intending to stay with your current lender, often the process can be very straightforward. If you plan on looking at the whole market then you would most likely have to complete a full application.
A deposit is often needed, irrespective of employment status these days. There are schemes available to assist with deposits for first-time buyers, which we describe below
Questions surrounding the availability of supply teacher mortgages are based around a combination of personal circumstances and varied lender criteria. For many, owning a home and working supply can go hand in hand. Allowing for all the different lender nuances it’s worth gaining an understanding of all your mortgage options from a qualified mortgage advisory service. In general terms, supply teachers with a solid credit standing, and a deposit and who have worked as a supply teacher for a consistent period of time will usually find options.
Here at Airsupply we’re often asked many of the questions above. Often from teachers that intend to move across to supply teaching or those that have been teaching supply for a while. Most supply teachers will need a qualified advisor to help gain the best overall mortgage arrangement. Qualified advisors generally charge a fee (broker fee) so that they can offer impartial advice. With that in mind we’ve reached out to Tembo, and have been offered a 50% reduced fee option for Airsupply teachers. Tembo are also happy to have an initial chat to help with general questions.
Airsupply teachers typically earn £30 per day more, doing work they choose.