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Helpful Mortgage Guidance For Doctors
There are a range of challenges to the mortgage application process that stem from having chosen a career as a doctor. First of all, there are a variety of complex employment scenarios that may apply to you and in many cases, more than one of these will apply. For example, you may be an NHS GP who also provides locum services privately.
Some employment types will lack stability, Self-Employed, trainee and locum roles, for example, may all prove difficult for lenders trying to establish a regular income pattern. This is especially true due to the common use of short term contracts and secondments.
Lastly, student debts for doctors are ordinarily some of the highest to repay, given the length of study involved. This has the potential to affect both your affordability criteria and your credit score.
Can these challenges be balanced against the longer term earning potential of a Doctor?
Thankfully being a doctor also comes with a range of unique benefits, which, in most cases, make buying a property easier.
Newly Qualified Doctors
Whilst there’s usually a minimum employment duration that lenders will expect applicants to fulfill prior to making a mortgage application, this does not usually apply to doctors.Therefore, so long as you are in paid employment or expect to be in the next six months, your application will be considered.
Trainee and Junior Doctors
As a trainee or junior doctor, most lenders will base your mortgage calculation on your fully qualified salary. This is especially true where you have the promise of a more senior position lined up at the end of your training period.
Self-Employed Doctor or Medical Professional
Whilst Self-Employed applicants generally have to supply at least three years worth of certified accounts with their mortgage application, Self-Employed doctors will often be considered with just one year of accounts.
Some lenders who specialise in offering mortgages to doctors will even consider doctors and medical professionals with less than a year of accounts available.
Usually, locum doctors do not always enjoy the same mortgage benefits extended to other doctors, however, there are independent mortgage lenders who can help.
If you can provide a stable history of locum work, specialist lenders use an average figure established from recent months or years income. This figure is used to calculate your affordability for a mortgage.
How do Doctors prove their income?
Overall doctors tend to benefit from a greater leniency when it comes to providing proof of income. The implicit trust that comes with being a doctor, alongside higher than average earnings incite less scrutiny than other mortgage applicants.
The proof of income you need very much depends on your employment type. A Mortgage Broker will be able to advise you of which documents to provide for your relevant employment type(s).
How much can Doctors borrow?
As your job type has no bearing on the amount you can borrow, being a doctor does not necessarily mean that you can borrow more or less than other applicants. The loan amount is based upon affordability and your credit score.
Do I get mortgage discounts if I work for the NHS?
There are some lenders who offer discount rates to clinical NHS employees, as key workers, however these mortgage deals are not usually extended to doctors or any other medical professionals within the NHS.
Are there any schemes to help Doctors get onto the property ladder?
Help to Buy scheme
This allows applicants to purchase a new-build home up to the value of £250,000 (£450,000 in Greater London) with a 5% deposit. A 20% government equity loan (40% in Greater London) is added to your deposit, so a 75% loan to value mortgage can be taken, giving you access to more lenders.
This scheme enables applicants to buy a share of a property.This makes mortgage more accessible, as the lower loan value leads to a significantly smaller deposit and repayments on your mortgage. You do pay rent on the remaining percent of the property.
Right to Buy
Local authority or housing association tenants can sometimes purchase their rented home through the right to buy scheme. As the properties are offered at a considerably reduced price, the mortgage is easier to secure and lower cost.
In this scheme applicants are offered a 95% NewBuy mortgage, rates are equivalent to 75% of a standard residential mortgage. Only 5% deposit is required from the applicant. With this mortgage type, you only have access to new-build properties.
How can a Mortgage Broker Help?
Applying for a mortgage as a doctor can be a complex process, especially where you have a variety of employment types. Mortgage advice from a broker who specialises in helping doctors and medical professionals can save a lot of time and stress. It can also give you access to deals from independent lenders which are not available on the high street.