How much income is required to get a mortgage

Doctor Mortgages - We’ll help you secure your mortgage.

Having a career as a doctor can present some unique challenges when it comes to buying a house or remortgaging. 

Lenders will, like all applications, look at outstanding credit and this can affect what is considered affordable for monthly repayment. Given the length of training and likely outstanding student debt, this can be problematic for some first time buyers in the medical profession. It is therefore essential to find a lender that is willing to consider the longer-term earning potential when assessing your mortgage application.

In addition, some lenders may not understand the way your income is structured. With a doctor’s livelihood typically made up of unpredictable revenue streams as opposed to a fixed salary, some lenders may assume that you are not meeting the minimum requirements for their mortgages.

Many doctor’s practices are established as Limited Liability Partnerships (LLPs). Doctors, therefore, will take income from a practice. Because of this, income can fluctuate, and this can be challenging for mortgage lenders.

A lot of doctors will do a combination of work for private and NHS practices or be employed as a locum. Varied hours can equate to varied income, and this can be difficult when trying to secure a mortgage.

The good news is there are a number of specialist lenders who are able to see beyond standard PAYE incomes and will cater their mortgage products to suit your needs. With our specialist advice, we can assist in the application process to find the best mortgage for your requirements.


Mortgages for self-employed doctors

A lot of medical professionals work on a self-employed basis. If you fall into this category, you may be worried about securing a mortgage. While the process is a bit different, there are many providers that are willing to provide mortgages to self-employed people. 

For a lot of people in regular employment, the process of securing a mortgage can seem somewhat simple. You will simply provide bank statements and payslips to show your earnings.

For freelancers and self-employed people, it can be more difficult to locate a lender that will accommodate your needs. With the correct mortgage advice from a mortgage broker, you may be in a better position to understand what evidence is required to prove your income and therefore gain access to the mortgage rates enjoyed by those on a regular salaried income.

So if you don’t know your SA302 from your Tax return or how to get your Tax Year Overview from HMRC then your mortgage broker can help.


Locum doctor mortgages

If you work as a locum, the very nature of your job probably means variable hours, irregular shifts, and even employment gaps, no matter whether you are exclusively doing locum work or in addition to another role. 

The irregular nature of locum pay can be problematic for a lot of traditional lenders. Fortunately, though, there are a number of smaller lenders that have a more flexible and realistic approach.

Without having regular hours worked or a permanent contract, specialist lenders will consider other factors to determine whether they can offer you a mortgage. They will typically average your income over a number of years or months to determine that you can afford the mortgage.

We have access to an extensive range of lenders so that we can help you to find the right mortgage.


How much can doctors borrow?

The amount of money you will be able to borrow depends on a number of factors. The main thing considered here is your income figure. This can be established via HMRC documentation like a SA302, self-employed accounts, or payslips. v

Once the lender has determined the figure, they will then conduct affordability checks to determine the maximum amount of money they can offer you. Typically, this is going to be in the range of five times the income figure. However, there are other factors that can have an influence here, for instance, adverse credit or high levels of consumer credit commitments like car loans and credit cards..

The majority of lenders will limit mortgage borrowing to 90 per cent of the value of the property. This means you are going to need to put down a cash deposit of ten per cent to borrow 90 per cent of the worth of the property. This is known as the loan-to-value ratio (or LTV).

Not every lender will be willing to offer a mortgage on a deposit of ten per cent, though. A lot of lenders will require the potential homeowner to have between 15 and 25 per cent of the value of the property saved.

The size of your deposit will also limit how much you can borrow. So if you only have a £10,000 deposit and the maximum a lender will lend is 90%, then you can only borrow up to £90,000 no matter how high your income is.


Contact us today for more information about doctor mortgages

If you are interested in taking out a doctor mortgage and you have any sort of queries or concerns, please do not hesitate to get in touch with us for more information. One of our friendly team members will be more than happy to assist in any way they can. 

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