Buying a house and getting a mortgage as an NQT

PV1993

Next year I will be starting my new profession as a teacher in a primary school. I had previously worked in a well paid job for a good company and so managed to save enough money for a deposit on a house. Now that I will be earning money again from September, I want to know how likely it will be for me to be able to do this.

My initial contract is only one year but that is the same for any/most new teacher(s). Will I be able to get a mortgage and will there be anything I would need to think about or take into consideration? I am 27 and although I love my parents I can't live with them forever! I don't want to not be able to buy a house until my contract is fixed because I don't actually know when that could be as teaching contracts seem different to other jobs. I also don't want to rent short term if possible as I see it as wasted money.

Also, my credit rating is pretty clean which I feel may go against me (apart from my car insurance which I pay yearly as opposed to monthly and my phone bill the only thing I have bought on finance is a guitar which I paid over 12 months with 0% interest). What could I do to improve this for a future mortgage?

I wasn't sure if this was more a house buying or mortgage related enquiry so apologies if it's in the wrong section! Thanks in advance.

boxer234

I’m a teacher my advice is that your first year will be very stressful especially with Covid.  What do you teach ? I would wait a year, stay at home and save, hopefully parents will look after you whilst you find your feet.  Look to get a secure contract then buy.  Next year honestly will go so fast.  You don’t need the stress of interviewing and worrying about paying a mortgage. 

PV1993

boxer234 said:

I’m a teacher my advice is that your first year will be very stressful especially with Covid.  What do you teach ? I would wait a year, stay at home and save, hopefully parents will look after you whilst you find your feet.  Look to get a secure contract then buy.  Next year honestly will go so fast.  You don’t need the stress of interviewing and worrying about paying a mortgage. 

I will be going into a Year 4 classroom so teaching everything (hopefully!). I do realise this isn't the best time but I just wanted to see whether it is possible as opposed to whether it is recommended as such

sgun

Ex-teacher and teacher trainer here - agree with boxer234. You won't know if you are coming or going this year. Buying a house takes up a lot of time and is very emotional. It would certainly have an impact on your NQT year when you need all your concentration on getting through the induction. You will do so much of your learning in this year and you should be making the most of the tailored mentoring and coaching that your new school will provide. I would wait. If you are set on it though then the answers are - yes, you could get a mortgage but should probably use a broker, you can improve your credit score by taking out credit and paying it off every month (this is a very basic explanation). Having adverse credit would go against you far more than not having had credit.

AdrianC

PV1993 said:

I also don't want to rent short term if possible as I see it as wasted money.

A lot of people say things like this. It really isn't true.

You're paying for a service - accommodation.

People have no issue with having their car on lease or PCH, so why is a similar method of providing accommodation somehow inherently bad?

sgun

AdrianC said:

PV1993 said:

I also don't want to rent short term if possible as I see it as wasted money.

A lot of people say things like this. It really isn't true.

You're paying for a service - accommodation.

People have no issue with having their car on lease or PCH, so why is a similar method of providing accommodation somehow inherently bad?

And the other good thing about a short term rent before buying is that it will give you a better idea about what your bills will be like, and so more of an idea about your budget for buying. 

pavlovs_dog

Another teacher here!  We offered on a house in June of my NQT year, having waited until my contract was made permanent before we starting the viewing process.  Even with a sizeable deposit and the most competitive mortgage rate we could find, our initial payments were around £900/month.  We simply could not have maintained that on my partner's salary alone had I lost my job.

Given the uncertainty facing school budgets at the moment, I personally would not contemplate taking on a mortgage whilst on a temporary or fixed term contract.  Our school is normally in a relatively healthy financial position but this year we are having to combine classes to absorb job losses because we cannot afford to replace staff who are leaving this summer.  With the impact of Covid19 on our community lettings, our short to mid term financial forecast looks pretty bleak.  You can ill afford to be complacent about being given a permanent contract in a year's time in the current climate.

Many banks have withdrawn a number of their mortgage offerings, making it more challenging and potentially more expensive for first time buyers to get on the ladder.  You may well find that the current financial uncertainty means you need an even bigger deposit than you currently have.  Lenders may not be willing to take the risk of a temporary contract either. 

Assuming you have just finished your PGCE, you are entering the profession with significantly less classroom experience than you should have.  NQT years are hard at the best of times, but for your generation of new teachers the reality is you are almost half as experienced as you should be upon entering the profession. Next year will be tough.  Give yourself the year to focus on developing your skills (if you think PGCE tiredness was bad, you ain't seen nothing yet, NQT tired is a whole new ball game ).  Build your credit rating by applying for a credit card and using it like a debit card, clearing the balance in full each month.  Save hard, whether that is to boost your deposit or your emergency fund.  

There will still be houses for sale in a year's time.

fluffyowl

1. Get a credit card and buy your food and petrol on it. Set the direct debit to pay off in full every month. Barclaycard is pretty good. They are keen to accept as many people as possible
2. Go for the mortgage. I got a mortgage on a one year fixed term contact. The mortgage advisor told me they aren't worried about a permanent contract, as no job is truly secure, and as a teacher you'll always be able to get work as a supply teacher. I was pretty happy with that! I've always had a job since and sometimes have lodgers to supplement the rent.

bucksbloke

fluffyowl said:

1. Get a credit card and buy your food and petrol on it. Set the direct debit to pay off in full every month. Barclaycard is pretty good. They are keen to accept as many people as possible

This is good advice. Use the MSE Credit Card Eligibility tool to check if you'll be accepted before damaging your credit history. 

zagubov

I've been teaching for decades. Your first year you'll need all your attention on picking up the skills for the job. After that you'll still be picking up skills for ages. But you will be able to get a mortgage as you'll have employability in a sector of the economy that will always be needed. Put all your spending on a no-free credit card that earns you rewards and is paid off in full. 

daivid

Get a decent broker when looking for a mortgage, some lenders look more favorably (e.g. Halifax) on fixed term contracts than others however they tend not to offer the best rates. As others have suggested you may wish to hold off until you are settled, renting doesn't build up equity but it does reduce the commitments. If you have to/choose to move for a permanent position or promotion as a tenant you give notice and move, as a homeowner you have to sell (could be a month or two, could be years) as well as finding the next home, or face a long commute. Buying is expensive (fees and costs) so cutting out a purchase may well save any money 'lost' through renting during the early stages of your career.

Living with parents sounds the best way forward (provided all are happy) as you can leave with no notice and presumably can build up your savings even more. Perhaps tell them you are planning to buy when you have completed your NQT year to re-assure them you don't plan to live with them forever