Mortgages For Junior Doctors
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Mortgages for junior doctors
Of all the professions out there, most people would think that being a doctor would make you a shoo-in for getting a mortgage, the perception being that doctors are high income earners with good job security.
So it can be surprising to hear that sometimes doctors can find it challenging to find suitable mortgages.
What problems do junior doctors have when applying for a mortgage?
New job
If you’ve just qualified, you may not have started your first job as a fully qualified doctor yet. Or you might have just started but don’t have any payslips yet.
Evidencing your income is a key part of applying for a mortgage.
Student debt
Doctors typically have high levels of student debt because of how long the training takes. When lenders calculate how much you can afford to borrow, they take student loan repayments into consideration.
Address history
It isn’t uncommon to have to move around a lot as a trainee doctor in order to be closer to your next placement. Having a clear address history is important when it comes to your credit score.
Doctors living and working in the UK from abroad can also find it tough, as some lenders find it difficult to assess credit history if you haven’t been in the UK for very long.
Can I get a mortgage as a junior doctor?
As long as you have a job lined up, then some lenders will look to make you a mortgage offer. You will need a signed employment contract, with a start date not more than three months away.
If you have qualified as a doctor in the last five years, you might be able to borrow more than other people. Some lenders offer special products to newly qualified professionals, such as doctors, as they expect your pay will increase quickly and significantly with experience. While they limit most people to a maximum of 4.5x their income, they could offer you up to 6x.
Can I get a mortgage as a junior doctor if I don’t have permanent right to reside in the UK?
It’s possible to get a mortgage without having settled status. Lenders who work with foreign nationals can accept both skilled worker and dependent spouse visas.
Some need to see at least two years’ UK address history alongside one year or more remaining on your current visa. But don’t worry if you don’t have that, as other options may be available.
It’s worth noting that you may need to have a bigger deposit than a UK national. Again, it varies by lender, but 10% is typically the smallest. Some even require 25%.
Why The Mortgage Store Chorley?
Exclusive rates you won’t get directly from lenders
A dedicated point of contact from initial enquiry right through to completion and beyond
Appointments seven days a week, to best suit your schedule
Ongoing rate monitoring until completion as standard
Do you have a question?
How much can I borrow?
There’s no set calculation to work out what you can borrow. A personal assessment of your financial situation needs to be done first.
As professionals, junior doctors may be able to borrow more than someone in a non-professional role.
I have a lot of student debt, will this be factored in?
Student loans are counted as committed expenditure.
The good news is, lenders don’t usually factor the overall balance into their debt-to-income ratio; instead, they look at the monthly payment.
A debt-to-income ratio is the total balance of any outstanding debt you have compared to your annual earnings. It’s usually expressed as a percentage. So someone with £50,000 on credit cards, who has a £50,000 salary, has a debt-to-income ratio of 100%. Lenders typically want to see a debt-to-income ratio of 50% or less.
If your student debt is on credit cards, or if you took out personal loans that you’re still paying back, these will count towards your debt-to-income ratio.
Can I get a junior doctor mortgage with bad credit?
Bad credit can affect your chances of being accepted for a mortgage.
Not all bad credit will immediately disqualify you, however.
A lot depends on how long ago it was, what it was for, how much it was for, and the type of bad credit that resulted, e.g. a missed payment or a default.
Some lenders will need the arrears to be paid off before being able to consider you.
How much deposit is needed?
As little at 5%. Your circumstances may mean a bigger deposit is needed, for example if you have adverse credit.
How can The Mortgage Store Chorley help with mortgages for junior doctors?
At The Mortgage Store Chorley, we work with a number of mortgage providers that specialise in helping newly qualified doctors find a mortgage.
We take the time to discuss your income and way of working with you, so we can paint the picture to the lender in the best way possible.
Also, we understand you might work irregular hours, so we don’t stick to a nine-to-five way of working. We’ll find a time that works best for you.
Get in touch with us today for a chat on how we can help.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
