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Doctor Mortgages – finding a good deal
While your earning potential is something lenders should find reassuring, it can be challenging for doctors to unlock their full borrowing capacity. A good Mortgage Broker will help you compare the options.
How can I find Doctor mortgages?
There aren’t any specific products just for Doctors, but some lenders are more understanding than others about the nuances of the medical profession. Some specifically specialise in ‘professional mortgages,’ that are designed to suit certain job roles. It can therefore take some time and research to find the most suitable mortgage options.
Some of the reasons that Doctor mortgages can prove a little more complex than the average mortgage application include:
- Student Debt – With so many years of study, many doctors can rack up a large student debt. Lenders will want details of what is still outstanding to include in their affordability calculations.
- Multiple employers – If you work across various NHS Trusts and/or private practices, it can be more complicated to prove your income.
- Newly qualified Doctors – As a Junior Doctor you may find that your contracts are short-term, which might mean that you don’t fit some lenders’ criteria. You may have moved around geographically too, which can also affect the lender’s view of you.
- Future earnings – Because Doctors have excellent career potential, some banks and building societies will take this into account and offer you a more favourable mortgage deal. The trick is to identify those mortgage lenders.
How much can a Doctor borrow?
The general rule for mortgages is that an applicant can borrow around 4-5 times their annual income. As a Doctor, then, the main focus is on proving your total income. This is straightforward if you are on a single salary from an NHS employer, but earnings. it becomes more complicated if you blend employed work with private practice or locum working.
Any mortgage will require a cash deposit, too, with 5% the minimum. Putting down a bigger deposit will reduce the monthly repayments on your mortgage and potentially give you access to more lenders. That usually means you can find lower interest rates and more favourable deals.
How do you prove income if you are a Doctor?
To prove your income you will need to provide various documents to your chosen lender. If you are employed via PAYE, you will just need to supply recent payslips to confirm your annual salary.
If you’re a locum Doctor, a GP or you work in a few different settings, you may need to provide practice accounts, your self-assessment tax forms and bank statements when you’re applying for a mortgage.
Do I get mortgage discounts if I work for the NHS?
Certain mortgage companies will offer key worker discounts to NHS employees. This can mean discounted rates or lower fees. But some of these NHS mortgages exclude Doctors – it varies by lender. You will need to look at the criteria for these deals; or get a broker to do that for you.
Can I access Government Help to Buy schemes as a Doctor?
Various government schemes now make it easier to get on the property ladder. These are open to everyone, so Doctors are certainly eligible. In many cases there is an upper limit on the property value.
Shared Ownership allows you to buy a 25% to 75% share of a home, paying rent on the remainder. You can grow your share of the property over time as your earnings increase.
Right to Buy
If you have lived in a property owned by your local council or a Housing Association for three years or more, you could buy it with a discount. Right to Buy can reduce the cost of a home by up to £84,200 in England or £122,300 in London.
How can a Mortgage Broker help with Doctor mortgages?
At Choice Mortgages we’re professional Mortgage Brokers, here to help you explore all your mortgage options. We’ll talk to you about your specific situation and property goals to give you tailored mortgage advice.
We compare mortgage products from across the market, looking at fees, costs and criteria to recommend the most appropriate options. We take the stress out of finding the right mortgage deal and the application process.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.