Doctor Mortgage

How do mortgages work for doctors?

Arranging a mortgage for a doctor is no different to arranging a mortgage for any other occupation. You will have to provide proof of ID and address, evidence of your income, bank statements and a credit report. Where mortgages for doctors can vary slightly compared to other occupations is around how the income is earned, how you’re employed and the overall employment history. Are you in training and earning a stipend? Are you employed or self-employed? Are you a locum, on a fixed-contract or employed via an agency? Do you work with multiple hospitals, practices and clinics? There’s a wide variety of employment types and forms of income for doctors. Getting a mortgage is about establishing your situation and finding suitable options.

Can it be difficult for doctors to get a mortgage? Why?

It can be, because of the variables around how doctors earn their income. Each lender has their own criteria for assessing income, and sometimes your circumstances might not fit a specific lender’s criteria. Or, perhaps the criteria might limit the income that can be used. Even for NHS employees, it can be restrictive if you’re on a fixed-term contract. We’ll go through that in more detail later, I’m sure.

How do high levels of student debt affect a doctor’s ability to get a mortgage?

It’s no secret that the debt accrued while studying to become a doctor can be very high. Once you’ve started earning sufficient income to start repaying that debt, it does affect your overall disposable income. The majority of lenders will include your student loan deduction – or the payments you make via a self-employed tax return – as a commitment within the affordability assessment. Depending on the individual circumstances, it could impact how much you can borrow.

What impact do short-term contracts have on a mortgage application for a doctor?

Due to the higher risk of short-term contracts, many lenders will want a sufficient contract history. They might ask for one or two years’ prior experience, as well as evidence of the renewal of current contracts. The amount of time left on your existing contract is also a factor. That could be an issue for newly qualified or inexperienced doctors. However, certain lenders are more favourable on lending criteria for doctors, acknowledging the high demand for your profession and the strong likelihood of your contract being renewed.

How does complex income affect a doctor’s chances of securing a mortgage?

It’s very much down to the individual circumstances and why the income is deemed complex, although a complex income doesn’t necessarily prevent you from getting a mortgage. What’s more important to a lender is the consistency, your history and the reliability of that income in future. Some lenders may have quite rigid criteria which may not fit your circumstances, but others are more favourable to doctors and can make common-sense lending decisions. If we approach them with a strong case, good credit history, and a track record of your income, we can usually find the right outcome.

Why might a history of moving affect a doctor’s mortgage application?

If you’re regularly moving and relocating as a doctor, your address history needs to be up to date, which involves registering on the electoral roll, updating utility providers, council tax and other financial commitments. That will avoid any abnormalities on your address history, which would otherwise affect your credit score.

How could professional mortgages help doctors in the mortgage application process?

A few lenders specifically market themselves as offering professional mortgages and often have enhanced affordability assessments. For example, some can lend 5.5 or six times the income for newly qualified doctors, on the basis that a newly qualified doctor will have reliable salary increases as they progress in their career. They may also have more favourable lending criteria for doctors, potentially around employment type, history, multiple income streams and the percentage of each income stream they will use. If you’ve got a main occupation and then a second job as bank staff, do they use 100% of that bank income or just 50%? We may also find special professional interest rates and products. As doctors are viewed as professionals, you might get an exclusive product with a cost-saving attached. In some cases, to qualify for certain criteria, you have to take a specific product with that lender.

What are the benefits of using a specialist broker or mortgage broker for a doctor’s mortgage application?

We’ll help you navigate the market efficiently and recommend a solution that you may not have considered. This could help you in multiple ways, whether enabling you to buy sooner than you thought, increasing your budget, or remortgaging on more favourable terms.

What are the credit score considerations that a doctor should keep in mind when applying for a mortgage?

Your credit score and credit history are, of course, a vital part of a lender’s overall assessment. If you’ve already got a complex income plus a poor credit history, it can impact your options. As a doctor, if you’re relocating frequently, it’s so important to keep your address details up to date and to be listed on the electoral roll. Keep your financial associations up to date, too, such as banks, utility providers and the registration of your vehicle if you drive. Very often, people fail to keep their addresses up to date, and they close down a TV package or a utility bill, but don’t do it correctly. They come to us for a mortgage only to find out that they’ve got several missed payments on a utility bill, even a default. Or, they’ve picked up a parking fine or been caught speeding, but the letter went to their previous address. Now they’ve got a county court judgement. You’ve got to be vigilant when you’re changing addresses.