NHS Mortgages
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NHS Mortgages
Chirag Patel talks about mortgages for NHS workers.
Can you explain the mortgage application process for an NHS worker?
The mortgage application process for NHS workers is similar to that of other professionals, but some lenders recognise the stability of NHS employment and might offer more flexible terms.
The first step is assessing eligibility. Lenders look at income, employment type – whether that’s permanent, fixed term or locum – and financial history. After that, they work out borrowing capacity, which is based on your income, expenses and your Loan to Value, which depends on your deposit.
The next thing is to provide the necessary documents – proof of income, ID and bank statements are typically required. Next we would submit an application, and the lender would carry out credit checks and assess affordability.
Once they’re happy, they’ll issue a mortgage offer. That’s when your legal process typically begins for the purchase or remortgage. As always, I’d suggest getting advice from a mortgage professional to ensure that everything goes as smoothly as possible.
What documentation do I need to provide for a mortgage as an NHS worker?
If you’re an employee you will normally need pay slips for the last three months to confirm your regular, consistent income.
Then lenders normally want to see bank statements, to verify salary deposits and financial commitments. They’ll sometimes ask for proof of employment, so a contract or letter from HR might be needed, especially for fixed term or locum workers.
For anti-money laundering purposes we need ID and proof of address with a passport, driving licence, recent utility bill or your bank statement.
NHS workers with variable incomes, such as shift allowances or overtime, may be asked for additional proof that confirms your earnings.
How can I find a lender that offers a mortgage as someone who works for the NHS?
Many lenders will consider applications from NHS workers, but some may offer criteria that better suit those with shift-based earnings or fixed-term contracts.
Ways to find a lender include checking with high street banks and building societies, exploring mortgage comparison websites, and speaking to a mortgage broker who understands NHS employment structures.
A broker can really help you match your NHS employment to a lender that recognises your specific income structure. That can be invaluable. As we know, a lot of NHS workers work shifts and might not be around during the nine-to-five that most banks operate under. A broker can be invaluable in managing that process, too.
What are the typical interest rates and loan terms for a mortgage as someone who works for the NHS?
The interest rates are the same market rates offered to any other client. There won’t be any specific rates for the NHS.
As a guide on how interest rates and loan terms can vary, they are based on market conditions, so they fluctuate. Checking with lenders or gov.uk for current information is advisable.
They’ll also vary depending on the deposit side. A higher deposit, normally increasing in 5% increments, will lead to lower rates. Then there’s the loan term. The mortgage could range from five to 40 years – and longer terms will reduce your monthly payments, but will also increase the overall interest you pay.
The other thing to think about is fixed versus variable rates. Fixed rate mortgages offer consistent payments, whilst variable rates can change based on market conditions. Comparing different mortgage options is key to understanding how the rates and terms will impact your mortgage payments.
Can I use a mortgage to buy a property jointly with someone else as an NHS worker?
Yes, NHS workers can apply for a joint mortgage with another person, such as a partner, a family member or a friend. Lenders will assess the combined income to determine borrowing capacity. They’ll look at the credit histories of all applicants.
Some may be concerned with how the ownership will be structured. Is it joint tenants or tenants in common?
A joint mortgage can definitely increase your borrowing potential. All parties must be aware that you have joint and several responsibility for the mortgage payments. That means if your friend or partner didn’t pay their half of the mortgage, you’d still be liable for the full monthly payment.
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What happens if I am no longer employed by the NHS after obtaining a mortgage?
That’s absolutely fine because, as we mentioned before, there aren’t any specific NHS-only mortgages.
Your mortgage will remain valid even if you leave the NHS. Just bear in mind that future mortgage applications or changes to your loan, such as remortgaging, will be assessed based on your latest employment status.
If your income decreases after leaving the NHS, managing payments may become more challenging. Seeking financial advice early in those situations is recommended.
Can I pay my mortgage if I need to move to a different property as an NHS worker?
Yes, of course. The typical residential mortgage will have a condition that allows porting, but it’s important to check your contract with the lender. Porting basically means transferring your existing mortgage to a new property.
Most lenders will allow this, but approval does depend on meeting affordability checks at the time of the move and the new property meeting the lender’s criteria. It will be subject to a fresh valuation.
There could potentially be changes to interest rates and terms if you are switching from repayment to interest only or doing additional borrowing. If the new property costs more, additional borrowing might be required, and will be subject to the latest rates – which are likely to be different.
Checking with a lender or your mortgage broker before planning that move is vital, so you don’t waste time looking at properties that you might not be eligible for because of affordability.
Are there any additional fees or charges associated with a mortgage as someone who works for the NHS?
There’s nothing additional just because you work for the NHS, just the typical mortgage fees that we would make you aware of, including arrangement fees. These are charged by lenders for setting up the mortgage.
Valuation fees cover the cost of assessing the property that’s potentially being purchased or remortgaged. There can be legal fees for the solicitor handling that purchase. Then there are early repayment charges. If you decide to repay the mortgage early or switch deals, you might be subject to those charges.
It’s really important to check the fee structures before you apply. A mortgage broker can go through this as part of the analysis of your budget. I’d certainly encourage any clients to do that.
What happens if I’m unable to make my mortgage payments as an NHS worker?
If you’re struggling with payments, it’s really important to act quickly. Contact the lender immediately. Some might offer payment holidays or a restructure – that is, if you’re on a repayment, they might be able to temporarily put you on interest only.
You should seek financial advice. Services like the Citizen’s Advice or Shelter or Step Change can help. Then, review your budget. Reducing discretionary spending might help in the short term.
We can’t get away from the fact that missing payments will impact your credit score. And, if there’s consistent non-payment, the lender does have the right to repossess in extreme cases.
Can I get a Buy to Let mortgage as an NHS worker?
Yes, an NHS worker can apply for Buy to Let mortgages like any other client or profession. The way that differs from a residential mortgage is that lenders typically require a larger deposit, so often 25% more.
The rental income is normally expected to cover a percentage of the mortgage – typically between 125% to 145% of the payment. Then, some lenders require a minimum personal income, separate from the rental income. That’s normally around £25,000 a year.
Buy to Let mortgages have different tax and regulatory requirements, so I would strongly recommend seeking professional mortgage advice on this – and the product in particular.
What if I have bad credit? Can I still get a mortgage as an NHS worker?
Sure. Having bad credit doesn’t automatically prevent NHS workers from getting a mortgage, but the options may be more limited. Factors include the severity of credit issues – whether there are missed payments, defaults or CCJs, whether the credit problems were recent or historic, and then the deposit size.
A larger deposit may improve your chances. Some lenders specialise in applications from those with adverse credit, and a mortgage broker can help you explore the available options.
How do I apply for a mortgage as an NHS worker? How can a mortgage broker help here?
Applying for a mortgage basically involves getting checked for eligibility and credit score, determining the borrowing capacity and then gathering the relevant documents. Next, we submit an application to a lender; and once your mortgage is approved, complete legal processes. You’ll receive a mortgage offer once the valuation has been completed.
That’s typically the process that a mortgage goes through. A mortgage broker can assist by identifying lenders familiar with the NHS employment structures, and we help with complex applications such as fixed term contracts or multiple income sources.
We provide guidance on improving your eligibility, maybe helping you with the credit profile or looking at your expenditure and credit commitments. We help you secure a suitable mortgage for your circumstances, saving you time and effort by navigating the market on your behalf.
Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
The Financial Conduct Authority does not regulate some forms of Buy to Lets
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances, but we estimate it will be £499.
Chirag Patel trading as CKN Mortgages is an Appointed Representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority.
