Getting a mortgage as a doctor
Despite being on good salaries, many doctors and medical professionals find it surprisingly difficult to secure a mortgage. As a doctor, you might not have conventional working patterns. You might also be required to regularly work overtime and as a result, your income might differ each month. Lenders often don’t realise the earning potential of a doctor because of this, frequently rejecting applications.
Other doctors who get mortgage approval are often not given the full amount that they should be able to borrow. This is due to high-street lenders not fully understanding how doctors working hours, pay packages and contracts work.
Contract based roles
Many doctors and medical professionals are in contract or locum roles. This also includes junior doctors who don’t yet have permanent employment contracts as part of their training. Many mortgage lenders consider any contract based jobs to be unsecure and therefore are less likely to approve your application.
If you’re a practice partner then you will be considered as self-employed. Getting a mortgage when self-employed is generally not easy, especially when using a lender or broker who doesn’t specialise in this area.
Mortgage approval for doctors
Proving to lenders that you have a sustainable, reliable job may be necessary if you’re a doctor looking for a mortgage. Your best chance at getting approval is if you select lender or mortgage broker who will consider your individual circumstances.
Other ways that can improve your chances of getting mortgage approval:
Save for a larger deposit
Applying with a larger deposit can considerably help to increase your chances of mortgage approval. If you’ve had experience with mortgage rejections then it might be a good idea to consider applying later on when you have saved more for a deposit and are looking to borrow less from a lender.
Use an accountant
If you have access to an accountant, they can help to increase your chances of approval, especially if you’re self-employed. An accountant will be able to help you get into a position where you’re more likely to get mortgage approval as they will have access to your accounts and be able to collect all the relevant documentation for you.
Check your credit score
Lenders will look at your credit before they consider anything else. Before applying you should make sure you do the same by checking your score with a credit company such as Experian or Check My File.
If you do have bad credit then as a specialist broker we can look into your individual circumstances and help source a suitable mortgage lender.
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Why Clever Mortgages?
At Clever Mortgages we can offer you the support and advice required to ensure you get the right mortgage for your first home. We provide access to a comprehensive range of mortgages from across the market. We are also authorised and regulated by the Financial Conduct Authority (FCA) and adhere to the Treating Customers Fairly (TCF) guidelines, so you can be confident that we will treat you with integrity and only recommend products that meet your needs.
A fixed rate mortgage is where your interest rate stays the same for a set time period (usually between 2-10 years). As a result your repayments are exactly the same each month, regardless of what happens to other mortgage rates. These types of mortgages are popular with first time buyers and people looking to budget each month, especially those who have suffered from a poor credit history.
The main downside to a fixed rate mortgage is that if mortgage rates go down you can be paying a higher amount than you would on a variable rate mortgage. However, this can also go in your favour and if interest rates increase you can be paying less than you would on a variable rate.
Every lender will have their own standard variable rate (SVR), which is considered their basic mortgage. This interest rate goes up and down, usually in line with the Bank of England’s interest rates but the lender is free to raise this at any time.
This means that your monthly payments can go up or down depending on what the interest rate is at a given time. Some months you could be paying more whilst other months you could be paying much less.
A discount mortgage is when a reduction is applied to the lenders Standard Variable Rate (SVR) for a certain length of time (typically 2-3 years). Discount mortgages are attractive as they can allow you to pay slightly less than the bank's standard rate. However as the SVR can still fluctuate they are not ideal for people who are looking to stick to a strict long term budget.
A tracker mortgage is basically a type of variable rate mortgage. What makes them different from other variable rate mortgages is that they follow – track – movements of another rate, the most common rate that is tracked is the Bank of England Base Rate.
A capped mortgage is the same as a variable rate mortgage; however the interest rate can never rise above a set “cap”. These mortgages can work well for people who can budget for different mortgage repayments each month but want the reassurance that their payments will never go above a certain amount.
Offset mortgages are linked to a savings account as well as your current account. Your savings will be 'offset' against the value of your mortgage, and you'll only pay interest on your mortgage balance minus your savings balance. These types of mortgages work well for higher earners or people who have a good amount in savings that they want to use towards paying their mortgage.