Locum Doctor Mortgages
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Locum Doctor Mortgages (Part 1)
What is a locum doctor mortgage? How does it differ from a regular mortgage?
A mortgage for a locum doctor isn’t a separate product – it refers to mortgage options tailored to those with variable income.
Unlike a salaried professional with a fixed monthly income, a locum’s earnings may fluctuate based on shifts and contracts. Some lenders are more flexible than others in assessing income for locum doctors.
What are the eligibility criteria for locum doctors to qualify for a mortgage?
Eligibility depends on factors like income history, length of time working as a locum and contract stability. Some lenders may prefer applicants with at least 12 months of locum experience, whilst others may consider shorter periods.
That’s especially true if there’s a strong earnings history – that is, they were employed previously.
What kind of documentation is usually required from locum doctors when applying for a mortgage?
Typically lenders will ask for pay slips, or invoices if you’re self-employed, tax computations and tax year overviews from HMRC, bank statements and details of previous, current and ongoing contracts.
Are locum doctors treated differently by mortgage lenders compared to salaried doctors?
Yes, in the sense that salaried doctors have predictable income, which makes affordability assessments more straightforward. Locum doctors may need to provide additional evidence of earnings consistency to reassure lenders.
Can locum doctors with irregular income patterns get approved for a mortgage?
Yes, but lenders will assess income differently. Some may average the income over 12 to 24 months, whilst others might take the most recent earnings into account if there’s a strong work history – where, for example, the doctor was previously employed for several years.
What factors do mortgage lenders consider when assessing the affordability of a mortgage for locum doctors?
They’ll typically look at the consistency and stability of income, the length of time working as a locum and previous experience. They will look at the deposit amount, credit history and existing financial commitments, as they would with any other mortgage.
Are there any specific mortgage products or deals available exclusively for locum doctors?
Some lenders may offer criteria suited to professionals, but these are not necessarily exclusive products. It’s always best to compare options to find a suitable mortgage for your circumstances.
The best rates might be from a mainstream high street lender, where the underwriter is happy with your experience – even if you don’t meet the standard self-employed criteria.
How does the income of a locum doctor affect the amount they can borrow for a mortgage?
Lenders calculate affordability based on income and outgoings. Some may use an average of the last 12 to 24 months of earnings, whilst others may consider the most recent income figures if stability can be demonstrated and there is proof of rising income.
Can locum doctors get a mortgage without a substantial deposit?
It really depends on the lender and the personal circumstances. There may be options with lower deposit requirements, but a larger deposit can help secure better terms with lenders. Typically, mortgage rates will reduce for every 5% of deposit provided.
Are there any additional fees or charges associated with getting a mortgage as a locum doctor?
No, standard mortgage fees apply – such as arrangement fees, valuation fees and conveyancing fees. These will vary between lenders. If a broker is engaged, there may be broker fees as well.
Do you have anything else you’d like to add before we come back with part two?
This area of the market can be complex, especially with the additional documentation lenders will request, and different guidelines on contract length and experience.
It’s really useful to work with a mortgage broker who understands locum doctor income structures, and can therefore help identify the best lender for the client situation.
I’d also add that doctors are generally very busy people doing all kinds of shifts. Having a broker that can manage the process throughout, from initial enquiry through to completion, could prove very beneficial as well.
Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
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.
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Locum Doctor Mortgages (Part 2)
How does the process of obtaining a mortgage as a locum doctor differ from a regular mortgage application?
The process is similar, but often requires additional documentation to verify income. Lenders may assess earnings differently depending on whether you operate as a sole trader, you work under PAYE as a salaried person, or you have a limited company.
Are there any specific challenges or considerations that locum doctors should be aware of when applying for a mortgage?
These include proving income stability, finding a lender that understands locum work patterns, and potentially needing a longer work history to demonstrate consistent earnings as a contractor.
What steps can locum doctors take to improve their chances of securing a mortgage?
Firstly, I’d recommend that you maintain detailed financial records and engage an accountant to make sure that everything has been done correctly.
Make sure that tax returns and any tax owed to HMRC are up to date. I would also encourage you to minimise unnecessary debt before applying. The last piece of advice is to save for a larger deposit where possible. Normally, every 5% increase in deposit results in a better interest rate.
From a lender’s point of view, those lower mortgage rates reflect their reduced risk of not receiving funds in the event of a repossession.
Can locum doctors who work through limited companies still qualify for a mortgage?
Yes, but the way income is assessed may differ. Some lenders consider both salary and dividends, whilst others may take net profit into account instead of dividends.
How do locum doctor mortgages handle variations in income levels over time?
Lenders may average earnings over time to account for fluctuations. Providing consistent income records is key in demonstrating affordability.
Do locum doctors have access to the same range of mortgage products as salaried doctors?
Generally, yes, but eligibility criteria may differ. Some lenders offer flexible assessments for medical professionals, including locums.
The high net worth divisions of various high street banks, and also private banks, are quite keen on these types of professionals – because they generally tend to be high earners.
Are there any potential drawbacks or disadvantages to consider with getting a mortgage as a locum doctor?
It’s mainly about the requirements from the lender in that there may potentially be stricter affordability checks. There’ll generally be extra documentation requirements. Some lenders may also require a longer work history than for an employed doctor.
Can locum doctors remortgage their existing property to take advantage of better rates or terms?
Locum doctors can absolutely remortgage to take advantage of better rates. Again, lenders will be reassessing affordability, so having a strong financial track record can improve the chances of securing a competitive deal.
What options are available to locum doctors who wish to buy a property jointly with a partner or spouse?
They will have the same access to standard mortgage products. Having a joint applicant can sometimes make affordability easier, especially if the partner has a steady, salaried income.
Lenders will assess joint incomes when determining borrowing capacity, and this can often open up the options for a higher value home.
Are there any specific mortgage lenders or institutions that specialise in mortgages for locum doctors?
Lenders are always changing their criteria and their products depending on what market share they’re interested in.
Some lenders have criteria suited to locum doctors. Again, this can change over time. I would recommend consulting a mortgage broker who has experience of working with professions including doctors. We will identify the most appropriate options so you can make an informed decision.
What else do we need to know about mortgages for locum doctors?
Preparation is key. If you speak to a broker, you’ll understand very quickly what the mortgage market requires a locum doctor to provide. We’ll explain what will help you get into the strongest position, whether you’re looking to remortgage or buy a property.
So to improve your mortgage prospects and have a professional on hand that works for you, consider a mortgage broker with experience in supporting locum doctors.
Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
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.
