Doctors present an attractive case to lenders due to their high earnings, job security and ability to normally put down a larger deposit.
Why are doctors attractive to mortgage lenders?
Because of the above average income that doctors tend to earn, they present less risk for a lender due to their high borrowing limit, affordability level, ability to make the repayments on the mortgage and also the potential to put down a higher deposit. All of these factors combined appeal to lenders.
What is a borrowing limit?
Lenders calculate the maximum borrowing limit for clients by multiplying their income by four or five times. For example, if a doctor earned £80,000 a year, a lender would work out that their maximum borrowing limit would be between £320,00 and £400,000 depending on the multiplication factor used in that particular case. Every lender can be different, so it’s ideal to prepare for the lower borrowing limit to avoid any complications.
So what are the difficulties?
Difficulties arise due to doctors either working in the NHS, private health services, or a mixture of both, which makes predicting future income, and monitoring current income, a bit of an issue.
Doctors will have to satisfy lender requirements, just like everyone else, when applying for a mortgage. Again, these requirements vary by lender.
What if I’m newly qualified or a junior doctor?
If you’re newly qualified, lenders may waive their usual requirement of having at least 3 months in employment. Not all lenders will, but there are specialist lenders that will.
If you’re a trainee, you’re working towards being a fully qualified doctor. In these circumstances, lenders may take into account the salary you would earn once qualified when calculating how much you can borrow.
What if I’m a self-employed doctor?
If you’re self-employed, lenders usually require at least two years submitted accounts. Some lenders will consider your application with just one year of accounts, and some specialist lenders in some circumstances may even look to approve your application if you’ve only just started out as a self-employed doctor.
For advice on getting a doctor mortgage, whether you’re self-employed, newly qualified or a trainee, speak to one of our expert advisers who will be able to help you with the next steps.