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What You Should Know About Doctor Mortgages
Whilst the stability and salary that come with choosing a career as a Doctor or similar medical professional are attractive to mortgage lenders, you may face a unique range of challenges you hadn’t considered, when applying for a mortgage.
Many lenders, particularly the more traditional high street banks, are not set up for job types that fall outside of the standard nine to five pattern. As you’re more likely to have complex employment circumstances as a Doctor, this can be a challenge. Those Doctors who are Self-Employed with a private practice, trainees or carrying out locum roles, may find it more difficult to adequately document a stable income pattern for lenders, as these job types are often viewed as less stable.
The other challenge largely unique to those in the medical profession is significantly higher student debts. These have the potential to affect both your available income and credit score.
Can these challenges be balanced against the longer-term earning potential of a Doctor?
The good news is that the trust, earning power and long-term stability associated with being a doctor largely outweigh the complications you can face when applying for a mortgage.
Newly qualified Doctors
The standard lender expectation is that applicants have been employed within their current job for a minimum period of time. However, Doctors experience more flexibility in this area. In fact, the majority of mortgage lenders will consider an application from Doctors as long as they are currently in or expect to be in paid employment within six months.
Trainee and junior Doctors
As a trainee or junior Doctor you will usually find that lenders are willing to calculate your loan based on your future, fully qualified salary. If you have a guaranteed, more senior role post-training some lenders will even consider using the rate attached to that role in your calculator.
Self-Employed Doctor or medical professional
For Self-Employed mortgage applicants, finding a lender is notoriously more difficult than it is for their employed colleagues. The usual requirement is at least three years of certified accounts. However, Self-Employed Doctors often only need to show one year of accounts.
If you work exclusively as a locum Doctor, it can be more difficult to meet the acceptance criteria of a standard residential mortgage with some lenders. There are independent mortgage lenders, however, who specialise in helping Doctors with less-stable work types.
How do Doctors prove their income?
Doctors will usually benefit from greater flexibility from lenders in terms of providing proof of income. As part of our mortgage advice we can help you determine the exact documents required, depending on your employment type.
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We’ll take care of all the heavy work. From finding the right mortgage product and providing you with a detailed quote, to submitting the mortgage application on your behalf and guiding you right through to the completion of your mortgage.
How much can Doctors borrow?
Whatever your occupation, the amount you can borrow is based on a number of factors. Being a Doctor in itself doesn’t necessarily give you access to higher lending than other applicants. This is based predominantly on your affordability and credit score, rather than your job title.
Most borrowers can expect between four & five and a half times their annual salary. However, some newly qualified Doctors may obtain as high as 6 times their annual income, subject to affordability.
Do I get mortgage discounts if I work for the NHS?
Although discounts may be available to NHS staff, this usually applies exclusively to clinical staff and therefore Doctors are not eligible.
Are there any schemes to help Doctors get onto the property ladder?
Help to Buy scheme (currently closed)
This scheme offered applicants a chance to buy a new build property with an equity loan of up to 20% (40% in London), which is used to top up your own deposit of 5% minimum. This gave you access to a 75% loan to value mortgage. Which comes with more competitive rates and is easier to obtain. There were regional price caps on the value of the property you can purchase using this scheme. Depending on where in the UK you are looking to buy.
The 2021-2023 Help to Buy Equity Loan Scheme closed to new applications at 6pm on 31st October 2022. All eligible homebuyers had to legally complete by 31 March 2023.
This scheme helps those on a lower income to purchase 25-75% of a new home. Due to the smaller loan, a significantly smaller deposit is required and the affordability criteria is much more achievable. You will have to pay rent alongside the repayments on your mortgage, usually to a housing association or local authority.
A 95% NewBuy mortgage, at rates equivalent to 75% of a Standard Residential Mortgage can be used on newly built properties under this scheme, with just 5% deposit.
How can Mortgage Broker Services help?
Mortgage applications can be time-consuming and can be complex if you have multiple employment types. Here at Mortgage Broker Services, we specialise in helping doctors to find those independent lenders who are sympathetic to the needs of doctors and similar medical professionals.
We know how busy your chosen career can be and as such, aim to be available whenever you need us, to support you as much as you need throughout the entire mortgage application process.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.