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Doctor Mortgages – What you need to know
It’s a unique challenge, being a doctor, especially when it comes to finding the most suitable doctor mortgages. Lenders will look at the balance on any existing loans that you have to pay before making any decisions.
As a doctor, your student debt tends to be higher because of the length of time spent studying for the necessary qualifications and this could be a concern when you are looking to secure a mortgage. On top of this, the time spent in short term training contracts and with multiple NHS employers is often something doctors worry about showing to mortgage specialists.
There are some difficulties in arranging doctor mortgages due to the LLP (Limited Liability Partnership) status of many practices. Income is usually forecast rather than guaranteed, and all of these variables make obtaining doctor mortgages more difficult than usual, however, it doesn’t make it impossible!
Mortgages for doctors are still obtainable, as mortgage providers are aware that a complex source of income is a common thing for doctors. Thus, the requirements for Doctor mortgage applications are a little different.
Finding A Balance With Doctor Mortgages
Doctors are working in roles that are recession-proof: everyone will always need doctors of any speciality, and so mortgage providers will be able to find something to suit doctors, whether they are in locum work or a permanent contract.
While there may be a lot of variables, looking at the income potential of a doctor is the first thing mortgage lenders will look at, as well as their current contract and their past employment.
Many of the mainstream lenders on the high street don’t have the correct underwriting flexibility to recognise the complexities of the finance flow of doctors. The profession has a high-income potential, and a wide income range, however, there are lenders out there who are more flexible in their mortgage assessment criteria, and who specialise in offering mortgages to doctors.
How To Prove Your Income If You Are A Doctor?
If you are working in a new or private practice and are self-employed, you may find it harder to get a mortgage. Most lenders want to be able to assess two to three year’s accounts to confirm a customer’s income. There are, however, some more flexible niche lenders in the marketplace who will be happy to work with doctors who are looking for a mortgage.
For locum doctors, your variable shifts and potential LLP status can be difficult for the traditional lenders to decide about, however, some specialist lenders offer a flexible and more realistic approach when considering lending to doctors.
While there may not be a permanent contract to take into account, lenders will be able to take a look at the average income over months or years and establish the right income level to base affordability on.
How Much Can You Borrow If You Are A Doctor?
There is no set amount that you can borrow as a doctor, as this figure depends on your income. You can use payslips, self-employed accounts, and documentation from HMRC to prove income. Once your lender has confirmed the right income figure, they will then go ahead with their affordability checks to figure out precisely what you can borrow.
Your credit history will still be checked regardless, as this will determine your ability to borrow. Some lenders will limit borrowing to 95% of the value of the property, but it’s not uncommon for larger deposits to be required for doctor mortgages given the inconsistency in income.
Do Doctors Get A Discount If Working For The NHS?
Some mortgage providers will offer NHS workers and medical professionals discounts on mortgage rates that result in lower repayments on your mortgage. If they are opting for mortgages in the affordable housing scheme, there are more benefits as the loan fees can be reduced for five years.
Doctor Mortgages: Help to Buy/Shared Ownership Schemes
While there isn’t a specific mortgage for NHS employees, there are lenders out there who will specialise in supplying NHS staff with mortgages. The best deals can include buy to let mortgages and joint mortgages, or – as a doctor – you can be a part of an affordable housing scheme. Your mortgage broker will be able to consider your circumstances and tell you about each mortgage that will be available to you.
Once you enquire, they will put you in touch with the right mortgage types for your income and personal circumstances as a doctor. Shared ownership schemes are available, as are help-to-buy properties.
The right mortgage broker, authorised and regulated by the financial conduct authority, will be able to help you with the application process and mortgage advice, no matter what you are searching for as a doctor.