Is it easy for a doctor to get a mortgage?
It is relatively easy for doctors to get a competitive mortgage deal. Like any mortgage, the lender’s decision will depend of employment history, credit rating along with other specific eligibility criteria.
Mortgage lenders see mortgages for doctors as a good business sector given the job security offered by employment in the medical profession.
Lenders may offer special mortgages to doctors, although this again does depend on their employment status with a locum doctor potentially being treated differently from an established medical professional employed by the NHS.
Mortgage brokers who specialise in offering mortgages for doctors will be able to offer helpful advice on the best way of arranging a competitive mortgage and should have a good understanding of the different employment types in sector and more generally how the medical profession works.
Can you get a mortgage as a junior doctor?
Many mortgage lenders offer special mortgages for Junior doctors, trainee doctors or newly qualified medical professionals.
For junior doctors starting out on their career, mortgages are available to get them on the first rung of the property ladder.
Lenders offer enhanced mortgage terms such as higher income multiples, as well as a competitive mortgage rate for doctors starting on their careers.
Most competent mortgage brokers will be aware of which banks are offering competitive doctors mortgages.
How much can doctors borrow?
Professional mortgages aimed at the medical profession offer generous income multiples, which are often well in excess of those available to standard mortgage applicants. How much mortgage is available is still impacted by such standard lending criteria as credit scores, current income and loan size.
When assessing mortgages for doctors, the lenders will take into account not just fixed income i.e. salary, but also variable income. Lenders will assess various forms of income in different ways depending on their own lending policy.
What is the application process?
When considering their mortgage needs, it’s important for medical professionals to consult a specialist mortgage broker who has access to a good number of lenders across the mortgage market.
In that way it’s possible to gain access to a wide range of mortgage deals and improve potential mortgage approval.
The application process typically involves a number of stages as follows:
- Discussion/fact finding meeting with an adviser who can ascertain the clients requirements. Typically this meeting will include discussions of income, deposit, loan requirements, credit history and any background debt such as student debt which will be of particular significance to a medical professional.
- Gathering together of the required documentation to make an application. For example payslips, Company Accounts, bank statements and copy of credit file (which is particularly important in ensuring the applicants address history correct). A key thing here is confirming how the client is remunerated, for example locum doctors will be paid differently than those who are self employed and potentially have their own practice. Many private practices will be set up as Limited Companies or partnerships.
- Searching the market for the best mortgage products available from the right lender, either high street lenders, specialist lenders or even in some specialised circumstances private banks. The broker will consider both the terms offered by the chosen lender and particularly the mortgage rates available when formulating their mortgage advice. The recommended lender may not be purely based on rate however and other factors may be of importance such as credit score considerations and at what stage the applicant is at their career i.e. whether they are a newly qualified doctor or senior doctors.
What records do you need for an application?
Generally the records required when applying for a mortgage will be as follows:
- 3 months personal bank statements
- If you are self employed, you would need either your last 3 years SA302/Tax Calculations and corresponding Tax Year Overviews or last 3 years Limited Company accounts.
- If employed, the the last 3 months payslips
- For a locum doctor the proof of income will depend on whether they work via an agency who take care of their tax and national insurance requirements or if they are paid via their own Limited Company.
- Copy of credit report from a reputable credit reference agency.
Why do mortgage applications get rejected?
Generally a mortgage broker should know before they even submit an application if a mortgage application is going to be able to make it through the whole mortgage process.
A specialist broker who is able to provide mortgages for doctors will know the best lender to use and those that offer the best mortgages.
Some of the following are the typical reason’s mortgages may be declined:
- Poor credit – County Court Judgements, missed payments etc. Generally when a client has what is termed as “Adverse Credit” this may increase the overall mortgage broker cost
- Insufficient income to get the mortgage level required
- Background commitments that have a drag on affordability
Can you get a mortgage based on future income?
Yes, there are lenders who will consider future income and base their assessment of the mortgage level on this figure.
Typically, the future income will need to be confirmed in writing i.e. a job offer confirming the terms of new employment, start date etc.
If self employed the mortgage will be based on future expected income i.e. a private practice that can provide income forecasts from its accountants.
The lender will take into account any investment decisions about the running of the practice which will assist with the mortgage being repaid.