Mortgages For Doctors
Mortgages for doctors and similar health care professional includes great perks. The reason is simple; mortgage lenders favour medical professionals because they are considered more reliable than other borrowers. If you are interested in getting a mortgage for doctors, this helpful guide could help to get the best deal possible.
The mortgage interest rates for doctors are usually lower than those of general loans. This is because these loans have a higher credit score. In addition, the loan amount is also larger compared to other types of loans. The mortgages for doctors come under the category of NHS mortgages which we have also discussed in our previous article.
Traditionally, mortgage lenders favoured applications from professionals such as lawyers and doctors – basing lending criteria not just on their current income but on what they might be expected to earn in ten years.
So-called professional mortgages – such as mortgages for doctors – therefore, tended to offer the ability to borrow more than other applicants. Medical profession mortgage offers managed to reflect multiples of what the individual might be earning a decade or two from now. The freedom of lenders to make such offers became somewhat more limited following the financial crisis of 2008 and the formal Mortgage Market Review of lending criteria which came into effect in 2014.
Post Topics – Doctor Mortgages UK
Why can it be difficult to get a doctor’s mortgage?
Mortgages for doctors have become more difficult simply because of the much more extensive range of employment styles and contracts. Many doctors do not enjoy the fixed salaries some other professionals may depend on – and the easily measured fixed income projections welcomed by mortgage lenders.
Instead, you might be on a medical training contract, newly qualified, a locum doctor, self-employed, or on a temporary contract. Even if you are on a fixed contract, which you expect to be renewed, your future – and the income on which you depend – is by no means guaranteed. That uncertainty is highlighted in a case described in a Health and Care Update.
As a doctor, there is any number of possible factors determining your income now and in the short and longer-term future. The range and complexity of those possibilities make the mortgage lender’s task of calculating risk and affordability much more complicated – and if you are newly qualified, of course, you won’t even have the financial accounts on which to base any established pattern of earnings.
I am a newly qualified doctor. Can I get a mortgage?
Mortgage lenders typically require any applicant to have been in the same employment for at least the past three months.
For a newly qualified doctor, however, there are mortgage lenders that are prepared to consider applications if you have just started or expect to start your first job within the next six months. If you are interested in getting doctor’s mortgage as a newly qualified doctor, you can contact specialist broker or sometimes known as medical mortgage broker before starting your mortgage application process.
Are locum mortgages available?
As we have mentioned, however, by no means do all doctors work on regular fixed-term contracts, likely to continue into the indefinite future.
If you are currently working as a locum doctor, you are likely to have had at least a few years of regular employment within the NHS – a pattern of income that any potential lender may recognise and consider.
As a locum doctor, however, your hours are likely to vary – and, just as they vary, so too will your income. That is where mortgage lenders begin to encounter difficulties which may hamper your application for a locum mortgage. But locum mortgages are available – especially if you identify those lenders with the expertise and experience of dealing with locums such as yourself.
Can I get a self-employed doctor’s mortgage?
Applications for self-employed doctor mortgages may run into similar difficulties. Although you might once have worked as an employee of the NHS, you have now taken on a self-employed role. You might continue to work part of your time within the NHS and some of the time in self-employed private practice.
In any of these situations, it is likely to prove more than usually difficult to furnish the financial information about your income that any mortgage lender is certain to require.
Out of an abundance of caution, many lenders may insist on your submitting two – or even three – years of audited accounts or certified tax returns. These are used as evidence of what might be expected in terms of income from all sources in the coming years.
Fortunately, however, other mortgage lenders are less stringent in their demands for such evidence. They may accept just one year of accounts or tax returns, for example, or even consider your forecast of expected earnings from day one. If you are interested in getting a mortgage as a doctor in the UK, feel free to contact a specialist mortgage broker who can help you to apply via a specialist lender.
How much are doctors able to borrow for a mortgage?
As with other mortgage applications, mortgages for health care staffs – and the amounts that may be borrowed – are calculated in multiples of estimated or actual annual earnings.
The precise multiple employed is likely to vary from applicant to applicant but is typically at least 4.5 times annual income and, in the case of doctors’ mortgages, around five times.
It should be stressed that there is no fixed rule, however. Senior doctors and consultants, for example, might be offered a still higher level of borrowing. The amount may also depend on the size of the deposit you are putting down. The bigger your deposit, the lower the loan-to-value ratio, and the more you may be able to borrow.
Once again, what all of this highlights is the importance of consulting a specialist, a whole of market mortgage broker with the expertise and experience of dealing with mortgage applications from individuals with more complicated earnings and income patterns.
Next Steps – Mortgages for doctors
At NeedingAdvice.co.uk Ltd, we recognise the wide range of possible employment patterns of medical practitioners and understand the difficulties that may be faced when searching for doctors’ mortgages. We can help in your search – to find out how, please contact us. We’d love to help.
FAQs – Mortgages For Doctors
Can I get a doctor’s mortgage with a permanent contract?
Yes, if you are in a permanent contract, the chances of getting a mortgage are higher. However, you will need to show proof of a permanent employment contract (e.g. letter from the employer) and pay a fee to cover the cost of processing your application.
What do I need to provide to secure a mortgage for a doctor?
You will need to provide:
• Proof of identity (passport/driving licence)
• Proof of addressEvidence of a borrower's current address, such as a utility ... (utility bill, bank statement etc.)
• Proof of occupation (CV, payslips, contract of employment etc.)
• Proof that you have been working for at least 3 months before applying for the mortgage
• A copy of your most recent 2 years of full-time paid-up tax return
• Evidence of savings (bank statementsA record of a borrower's financial transactions often requir..., investment certificates etc.)
• Details of any outstanding debts
• Any additional documents requested by the mortgage lender.
Can I get a mortgage as a doctor with a bad credit score?
Getting any type of mortgage with a bad credit history is tricky and full of complications in the UK. As a mortgage borrower, you have to prove to the mortgage lender that you can afford the monthly payments. If you are interested, you can check your latest credit report here.
Can I get a mortgage as a physician?
Yes, you can get a mortgage as a physician in the UK. You will need to meet certain criteria such as having a good credit rating, being self-employed, having an active NHS practice or having a minimum salary of £25,000 per year. If you are interested, you can contact a market mortgage adviser. A mortgage or financial adviser can help you to get the best mortgage deals with various street lenders.
Is it difficult to qualify for a mortgage as a doctor?
The main difficulty lies in proving that you have enough money to repay the loan. In order to demonstrate your ability to make monthly repayments, lenders require evidence of regular income. This could include:
• Income from a pension scheme
• Salary from a permanent job
• Self-employment income
• Income from investments
• Other sources of income
If you are looking for a mortgage as a physician, you must ensure that you have sufficient funds available to cover the repayment of the mortgage. Your mortgage provider will want to see proof of regular income. It is important to note that some lenders may not accept applications from people who are self-employed. It is always better to contact a financial adviser.
How much does it cost to apply for a mortgage as a medical practitioner?
It depends on which lender you choose. Some lenders charge a small fee while others don’t. The amount charged varies between lenders but typically ranges from £100 to £200.
How can doctors improve their credit scores for getting a loan?
If you are a doctor, relocating will be very common for you. Relocation may affect your credit score.
Therefore, you should take care of your credit score. To improve your credit score, you can start paying off all your debt and also register on the electoral roll. You can also try to keep your credit card balancesOutstanding credit card balances, which may affect a borrowe... low. Also, try to avoid using cash when making purchases. Instead, use plastic cards. These actions will help you to build your credit score. It is worth noting that some street banks may approve your mortgage with bad credit too. However, they may ask you to pay higher interest rates than other lenders.
What are the benefits of applying for a mortgage as a Doctor?
There are many advantages of applying for a mortgage. Here are some of them:
• Mortgage loans are cheaper than bank loans.
• Mortgages are easier to obtain than bank loans.
You can easily find out if you are eligible for a mortgage by contacting a mortgage advisor.
You can save time and effort by finding out about your eligibility before visiting a bank.
Do I need to have a guarantor for my mortgage?
In some, if you are an NHS worker, you may not need a guarantorA person who guarantees to repay a mortgage if the borrower ... but in other cases, you might need one. However, there are many reasons why you might need a guarantor.
What bank product is known as Doctors Mortgages?
There is no specific product as doctors mortgages but lenders offer special mortgage terms for people working in the healthcare sector and sometimes call them doctors mortgages. A doctor’s mortgage is a type of home loan where the borrower pays back the loan over a period of years. Doctors usually borrow up to 80% of the value of their property. They can then use this money to buy another house.
Can I afford a mortgage as a doctor in the UK?
Yes, you can afford a mortgage as a medical professional in the UK. You just need to make sure that you have enough savings to repay the loan. If you do not have any savings, you can get a personal loan from a bank or building society.
Is it possible to refinance a mortgage as a doctor?
Yes, it is possible to refinance your mortgage as a doctor. This means that you can change the term of your mortgage. For example, you can extend the length of your mortgage so that you can pay more towards your monthly repayments.
How long does it take to process a mortgage application as a doctor?
The processing time for a mortgage application as a medical professional depends on the mortgage company and the lender. Typically, it takes around 2 weeks to receive a decision. If you need a faster mortgage approval decision, your appointed mortgage broker can help you with it.