Doctor Mortgages - What You Need to Know
The unique challenges of being a doctor
When many people enter into a medical career, they don’t anticipate that they would have any problems in applying for a mortgage, especially given the high pay and innate trust of doctors in particular. There are, however, a unique range of challenges to the mortgage application process for doctors and similar medical staff.
First of all, many doctors have complex employment circumstances, perhaps working for both the NHS, and privately as a locum. Some of the most common employment types doctors hold are also often associated with lower chances of getting a mortgage, such as Self-Employment, trainee and seconded roles. These types of employment are known to make it more difficult for lenders to establish a stable income pattern.
Given the extended length of study involved in becoming a doctor, high student debts can also be a factor in mortgage affordability.
Can these challenges be balanced against the longer term earning potential of a doctor?
The good news is, whilst the issues highlighted above would pose a problem for most applicants, these are largely balanced by the trust, professional qualifications and long-term earning potential of being a doctor.
Newly qualified doctors
Most lenders will consider a mortgage application from doctors as soon as they have started working or when they expect to start working in paid employment within the next six months. In other industries, it’s unusual to receive a mortgage offer with less than twelve months employment history.
Trainee and junior doctors
As a trainee or junior doctor, most lenders are willing to base the loan calculation on your fully qualified salary, which can help you achieve a higher loan, earlier in your career.
Unlike other Self-Employed mortgage applicants, who have to supply three years of certified accounts, Self-Employed doctors usually require just one year’s worth of accounts when buying a property.
Doctors who are solely locums, can receive some flexibility from Mortgage Lenders, and there are also specialist medical Mortgage Lenders who can help you.
How do doctors prove their income?
Lenders are usually more lenient when it comes to proof of income for doctors.The exact documents needed depend on your employment type.
How much can doctors borrow?
Mortgage lending is based on affordability and credit score, so being a doctor does not necessarily afford you access to higher borrowing. The loan calculation is based on a multiple of your annual income and those lenders who specialise in offering mortgages to doctors may be able to offer you a higher multiple.
Do I get mortgage discounts if I work for the NHS?
NHS doctors don’t usually qualify for the discounts offered to some medical professionals, as these are only usually offered to clinical staff.
Are there any schemes to help doctors get onto the property ladder?
Help to Buy scheme
The Help to Buy scheme is only open to First Time Buyers purchasing a new-build home. A government equity loan up to the value of 20% (40% in Greater London) of the property value is used to top up your personal deposit of 5%. This gives you access to 75% Loan to Value borrowing. As well as increasing your chances of being able to buy a higher value property, this can give you access to better rates.
This scheme helps those on lower incomes to purchase a percentage of their home. Between 10-75%). The deposit requirement and repayments on your mortgage will be much lower, however, you will also pay rent on the non-owned percentage.
Right to Buy
If you are renting a Local Authority property, the Right to Buy scheme can allow you to purchase it at a considerably reduced price. There are regional variations on availability, check the Right to Buy website for further details.
This scheme allows you to buy a new build home with a 95% discounted rate mortgage, with just 5% deposit.
How can The Mortgage Brokerage Help?
At The Mortgage Brokerage, we understand that mortgage applications can be complex and time consuming for those in the medical profession. We are happy to take on much of the administrative burden for you and work around your schedule, providing help and advice when you need it.
Our Mortgage Brokers have access to deals that are not available on the high street, so whether you’re a locum, trainee doctor or have diverse employment types, we can find the most appropriate deal for you.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.