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Searching for and securing a mortgage can be stressful enough but when you’re working in the police force you can have additional financial and time constraints to worry about. Working in shift patterns, receiving a low starting salary and having to bolster your income with overtime are just some of the issues you may have to contend with.
At Trinity Finance, we understand the demands of your job and strive to make the mortgage process as simple and stress-free as possible for you. We work closely with lenders who are sympathetic to the needs of those working in the emergency services and offer a more flexible approach when assessing your affordability for a mortgage.
Our expert mortgage brokers can advise you on how to strengthen your application and look at your income structure to maximise the amount you can borrow. Your case will be tailor-made and presented to the lenders best suited to meeting your mortgage needs. We know that time is precious for you and can work around your availability while searching for the most competitive mortgage product and overseeing your mortgage application from start to finish.
What is a police mortgage?
You may wonder how a police mortgage differs from other mortgages. The mortgages offered to police officers and staff are actually the same as those offered to everyone else. However, your profession can go in your favour, with lenders being more willing to work flexibly towards a successful outcome. As a respected career, you are deemed to be less of a risk when working in the police force, encouraging lenders to be more amenable with their lending criteria.
How much can you borrow?
Lenders have different criteria when it comes to deciding how much they’re prepared to offer you as a loan. They assess your income, expenditure and credit history when carrying out their affordability checks as well as the reliability of your income. Typically, lenders use a multiplier of 4.5 for your annual salary when calculating how much you can borrow. A career in the police force, however, often puts you in a better position. As your profession is a trusted one and there are excellent prospects for promotion, some lenders are willing to loan five or even six times the amount of your annual salary.
The downside is that a police officer’s starting salary tends to be lower than the national average. This puts you at an immediate disadvantage when looking at how much you can borrow. With a lender agreeing to use a higher multiplier, however, it can make a considerable difference to the amount. For example, if you earn a starting salary of £20,000 and a lender uses a multiplier of 4.5, the amount you can anticipate borrowing is £90,000. If a lender acknowledges that your stable career choice and promotion prospects make you a low-risk mortgage candidate, you can hope to borrow £120,000 if they use a multiplier of six.
As a police officer in Scotland, your starting salary will be slightly higher. With an annual income of £26,000 and a multiplier of 4.5, for example, you can expect to borrow £117,000. With the higher multiplier of six, you can look forward to a loan of £156,000.
Is your overtime included in the calculations?
Whilst some lenders won’t consider overtime, shift allowances, bonuses or a second income when calculating your mortgage loan, many lenders will. Lenders who frequently arrange mortgages for police officers and staff are more likely to do this. The additional pay needs to be consistent and you will be required to provide proof of this, preferably showing that you’ve received it for 6 months or more. For overtime, it’s helpful if you can show that it will also be available to you on a regular basis in the future. Other regular sums received can also be included in the loan calculations, such as maintenance payments and benefits. If you receive an additional income from self-employment, you will need to provide the lender with at least a year’s accounts although some lenders may only consider this with 3 years’ accounts.
However your income is structured, our qualified mortgage brokers, located throughout Kent, London and Edinburgh, can assess it to determine how much you can borrow and strive to maximise that amount. Give us a call on 01322 907 000 to get started or send an enquiry to us via our contact form and one of our mortgage specialists will reply to you as quickly as possible.
What if you’re new to the police force?
Lenders typically prefer borrowers to have been in their current role for as long as possible as this shows stability. With a career in the police force, however, you’re considered to be less of a risk, even in your probationary period. This is because joining the police force is usually a long-term career option and there is plenty of scope for promotion. It can be more challenging to secure a mortgage at this stage but a specialist lender will be able to help you as long as you provide them with the necessary documentation, including your employment contract.
Your deposit for a police mortgage
Saving an adequate deposit is one of the hardest issues to overcome when buying a property. Having to find 15% to 20% of a property’s value often puts it far out of your reach. As a police officer or police staff, though, some lenders will be able to accept a 5% deposit from you. This can still be hard to save but there are ways to help you meet your deposit needs.
A Lifetime ISA
A Lifetime ISA (LISA) is designed to help you save for your first home or to have extra funds available for your retirement. You need to open your account when you’re aged between 18 and 40 years old and can save without being taxed on the interest earned. A LISA allows you to save up to £4,000 each tax year and receive a 25% bonus from the government. This means if you save £4,000 in one year, the government will add £1,000 to this. The maximum bonus you can receive from the government is £32,000 and you are not taxed on this. This is a great way to boost your deposit and the more you can save, the more options will become available to you with lenders.
A gifted deposit
Another option is to use a gifted deposit from a family member or friend. This is a good way for a parent to help you get your foot on the property ladder as a first-time buyer. If you’re lucky enough to receive a gifted deposit, your lender will need confirmation that the person giving it to you is doing so as a gift rather than a loan. This means they cannot claim the money back and won’t have any rights concerning the property.
A joint mortgage
When you’re buying a property with someone else, you can pool your savings for the deposit. This drastically reduces how much you have to save on your own and means you can reach your total deposit goal sooner.
What help is available to you?
To help you get on the property ladder, there are some government-backed schemes that you can take advantage of.
Help to Buy: Equity Loan scheme
Aimed at first-time buyers with a 5% deposit, you can borrow an equity loan of up to 20% of the property price (or up to 40% in London) for a newly built property. With an equity loan of 20% and your 5% deposit, this means you only need to arrange a mortgage with a 75% loan-to-value (LTV) ratio. This opens up more mortgage choices and gives you access to better rates. When buying in London, an equity loan of 40% combined with your 5% deposit means you can look for 55% LTV mortgages.
Help to Buy: Shared Ownership scheme
Under this scheme, you buy a percentage of a property – between 25% and 75% – via a housing association. This means you only have to secure a mortgage for the share you’ve chosen to buy. This not only reduces the deposit amount you have to pay but means your monthly mortgage repayments will be lower too. Just bear in mind that you also have to pay rent to the housing association for the remaining share so be sure to factor that into your budget. When your finances allow, you can increase your share in the property until you own it outright.
Right to Buy / Right to Acquire
If you currently rent a property owned by a housing association or the local authority, you may be able to buy it at a price that’s much lower than the market value. The availability of these two schemes varies in different regions so you’d need to check to find out if this is a possibility for you.
The Right to Buy discount you are given depends on a number of factors, such as the type of property, where you live and how long you have been a council tenant. The Right to Acquire discount varies depending on where you live and ranges from £9,000 to £16,000. A good advantage of these schemes is that many lenders will allow you to use your Right to Buy or Right to Acquire discount as your deposit.
First Homes scheme
As a first-time buyer in England, you can take advantage of the First Homes scheme, which was launched in June 2021. This allows you to get a discount of at least 30% when buying your first home. The property must be a new build that’s registered under the scheme and you are given priority as a key worker. Buying a home via this scheme means you benefit from paying a lower deposit and can look for a smaller mortgage. The lower loan-to-value ratio makes you more attractive to lenders, opening up more options and better deals for you. A smaller loan amount also means your monthly repayments will be lower.
The 95% mortgage guarantee scheme
Whether you’re a first-time buyer or a homeowner looking to move up the property ladder, this scheme lets you secure a repayment mortgage with just a 5% deposit. You still have to go through a lender’s normal affordability checks but the difference with this scheme is that the government backs your loan. As long as the lender is happy that you meet its criteria, you will be granted a 95% LTV mortgage, which the government will guarantee to cover should you default on your repayments. Just bear in mind that having such a high loan-to-value ratio means that fewer deals will be offered to you and the rates will probably be higher.
Before deciding on one of these options, speak with your dedicated mortgage adviser to discuss them in more detail. Each scheme has its own criteria with different pros and cons. When you have considered all of the information and weighed them up against your circumstances and needs, you will be in a better position to make an informed decision.
Can you get a police mortgage with bad credit?
A good credit score goes a long way towards encouraging a lender to give you a mortgage but having bad credit doesn’t mean you can’t secure one. Various types of credit issues are assessed differently and lenders also take into account how recent the problems were.
At Trinity Finance, we work closely with specialist lenders who arrange mortgages for borrowers with bad credit. You may not be able to borrow as much as you could with a good credit rating and you may have to pay a higher rate of interest but you can still secure a mortgage, even with a severe issue on your credit record, such as bankruptcy. The more deposit you can pay and the lower the amount you need to borrow, the more options become available to you. These factors reduce the risk for the lender so you may benefit from a lower interest rate in return.
Our mortgage experts can check your financial situation and approach the most suitable lenders on your behalf to find the best deal for you. There are numerous ways to try and improve your credit score and we recommend that you do this before applying for a mortgage. Give us a call on 01322 907 000 for advice on how to do this.
Do you need mortgage protection?
If you’re working on the front line, you naturally have a higher level of risk than other police roles. If this is the case, it’s recommended to have mortgage protection in place. This provides cover for you and your family if you are injured or the unthinkable happens while you are on duty.
Even when you’re not in a frontline role, mortgage protection shouldn’t be dismissed. There are various types of mortgage protection products available that can cover you in the event of an accident and during times of illness and unemployment.
Our financial advisers can discuss the different degrees of cover with you and evaluate your risk levels. This will help you to make the appropriate decision depending on your circumstances.
We can secure a competitive police mortgage for you
Whether you’re looking to arrange a new mortgage for a property or to remortgage for a better deal than the one you have now, we can help to secure the best mortgage product for you. As a serving police officer or with another role in the police force, lenders will feel more confident about offering you a loan and, with unrestricted access to first and second charge lenders, we have the freedom to search for those most likely to meet your mortgage needs. We work closely with specialist lenders who regularly handle mortgages for police personnel and offer more flexible, competitive lending solutions.
Our experienced mortgage brokers are here to take the stress out of your mortgage application and ensure it’s a successful one. At Trinity Finance, we understand the demands of your job and the time pressures you face so you can rest assured our brokers can work flexibly around your schedule, keeping you up to date on your mortgage progress at every stage. Based throughout Kent, London and Edinburgh, they can assess your financial situation quickly and listen to your mortgage needs. Having maximised your borrowing potential, your dedicated mortgage consultant can then scour the market for the best mortgage deal to meet your requirements. Simply get in touch with us on 01322 907 000 or email us at firstname.lastname@example.org and we’ll provide you with a tailor-made service for your police mortgage.