If you’re a locum doctor and are looking to get yourself onto the property ladder for the first time, or even searching for the best remortgage deal you might have come up against some difficulties. That might include asking yourself the question whether locum doctors can even get mortgages?
Yes, locum doctors can get mortgage, but they will face challenges in proving to mortgage lenders that they have regular and stable income. When applying for a mortgage loan, locum doctors will need to provide a lot of evidence on earnings which can be trickier if they are self-employed.
With the help and support of a specialist mortgage adviser who knows how doctor mortgages work, you will be given the best available options and deals that suit your and your employment status.
You can contact one of our advisers today or read on to find out more about how you can stand a better chance of getting a mortgage as a locum doctor in the UK.
Locum doctor mortgage application tips
Specialist mortgage experts are often asked if locum doctors can get a mortgage. A lot of this uncertainty arises from some high street banks and large lenders declining this profession, in many cases due to poorly prepared applications.
#1: Budget for a deposit and additional costs
Make sure that you understand what costs will be involved in buying a house, flat, or any other property type.
It’s not just the deposit that you will need to have saved for, but also other aspects including:
- Surveyor fees
- Legal and solicitor costs
- Valuation fees
- Estate agent fees
- Stamp duty
- Electronic transfer fees
- Removal costs
It’s essential to budget correctly so you then have an idea on how much deposit you will need, and the total mortgage loan amount required.
#2: Check your credit file & credit history
When you apply for a locum doctor mortgage, or any mortgage for that matter, the mortgage lender will check your credit scores and history against your application.
Most people have credit, so this isn’t something that you should be concerned about, but it is essential to manage that credit, so you don’t have a bad profile.
Things you can do to improve your credit score and keep things in good shape are:
- Register on the electoral roll
- Pay bills on time
- Check for mistakes on your file
- Check for any fraudulent activity on your file
- Check to see if you are linked to another person
- Don’t have CCJs against your name
- Don’t have high levels of existing debt
- Don’t move home a lot
You can check your credit score using a number of online services including Equifax.
#3: Provide evidence of your income
With many locum doctors being self-employed, then you will need to demonstrate to the mortgage lender that you can afford the loan both at point of application and in the future.
For employed locum doctors this is much easier as historical payslips can be presented, but for the self-employed this gets a lot harder.
Mortgage lenders will require more evidence of your income and will want to see details over a longer period of time due to the fluctuations in monthly salary that can be common.
#4: Decide on what type of mortgage deal rate you want
Once you are in a position to apply for a locum doctor mortgage, you will need to decide what type of deal on the loan is best for you.
This is something that a specialist mortgage adviser who understands doctor mortgages can help you with, but in simple terms you have a couple of choices.
It could be that you opt for a fixed rate mortgage which means your monthly repayments are the same amount over a specified period.
Alternatively, you could choose a variable rate mortgage deal which is set against the interest rates, meaning the regular payments can go up or down.
#5: Decide on what type of term length you want
Whichever repayment type you decide to choose, also consider how long you want your mortgage deal to run for.
You might want to switch lenders in the future to take advantage of a better deal, but most mortgage companies will tie you into early repayment penalties should you decide to leave.
With that in mind, don’t just look at the interest rates available, but also consider any exit fees as these could end up costing you more depending on your future mortgage requirements.
#6: Seek an adviser who understands locum doctor mortgages
Why do some mortgage companies struggle to understand how locum doctors get paid?
Locum doctors can work varying hours and shifts across the month, meaning monthly income can go up and down – in some cases you might even have a month where you didn’t work.
To mortgage lenders this can look like a gap in employment, even though it’s not.
Our mortgage advisers have experience in helping locum doctors get mortgages based on their annualised contract.
In many cases this allows you to borrow more than you first thought to be achievable.
Our team of mortgage specialists also look to understand your monthly payslips and work with the lender to ensure that certain tax deductions do not affect your eligibility or what you can afford to borrow.
#7: Strategically prepare your application
The tips above should put you in a far better position to apply for a locum doctor mortgage, but we would still advise you seek the support of a specialist adviser.
With the high street banks, you will normally find that successfully applying for a mortgage will depend on certain criteria around your income and how your income is presented to the bank.
Our advisers can help you to prepare your paperwork, evidence, and your final application so that you can get a mortgage.
Frequently asked questions
What mortgage deals can locum doctors get?
Mortgages are unique and all of our expert mortgage advisers are committed to understanding your personal circumstances.
This means that each mortgage will be individual to your needs and current circumstances.
Above all, we will help you to find the best deal and rate that suits you.
Will the amount you borrow be based on tax returns?
Your tax returns are the simplest way to understand your earnings.
However, this is not just where it stops.
Our team of locum doctor mortgage specialists will review your tax returns and monthly payslips to ensure your mortgage is affordable.
They can then explain to you the maximum amount you could borrow as a doctor as a mortgage loan.
What if it’s your first year as a locum doctor?
In the first year it becomes a little more complicated as it’s only possible to project what your earnings may look like.
Some mortgage lenders will be able to work with the projections from a chartered accountant, but this isn’t that common.
If you are thinking about getting a mortgage in your first year of trading as a locum doctor it is worthwhile speaking to one of our team to get straight forward and clear advice on what is possible.
Can you get a mortgage as a locum doctor with bad credit?
Many people across the UK have less than perfect credit or are self-employed. Locum doctors are not exempt from this.
If you do have poor credit as a locum doctor, then the best thing to do is firstly review your credit report to make sure it is up to date and not showing any errors.
Once you have done this please contact the team at Specialist Mortgage Online and we will match you to a member of our highly skilled mortgage team.
What evidence will you need?
Mortgage lenders will require two years of accounts for self-employed locum doctors or a self-assessment.
For sole traders, net profit numbers will be required.
If it’s a limited company structure that you have, then the evidence required will be salary and any dividend payments in most cases.
We advise that you keep all paperwork and have the last two years of accounts as the very bare minimum.
Some mortgage lenders may accept your last two self-assessment forms as evidence. If you cannot locate those then contact the HMRC and request your last two SA302s.
A breakdown of the documents we advise you find, keep, and save for your application include:
- 3 months of your latest invoices or payslips
- 3 years accounts and or SA302’s if are self-employed
- 3 months of your last quarterly bank statements
What if you don’t have evidence?
If you don’t have evidence dating back 2 years, then it can be possible to find a mortgage lender who will still loan to locum doctors.
These lenders can lend mortgages with just 1 year of accounts, but it will significantly reduce down your choices.
That will mean you might only be able to choose from specialist mortgages that have higher rates than competing products. It might be worth holding out for a further 12 months to get a better deal.
What should you do next?
For quick and immediate advice on whether or not you can get a mortgage as a locum doctor, please contact us today.
Our specialist advisers and mortgage brokers will be able to help you find the best deal depending on your circumstances and are waiting now to talk to you.