How to get a Professional Mortgage and the benefits of getting one.
What is a Professional Mortgage?
If you need a Professional Mortgage and/or your require a larger than average Mortgage (£300,000 or more). Your best option is to approach a Mortgage Advisor which specialises in obtaining Mortgages for Professionals.
Like ordinary Mortgages, Lenders take into account a series of qualifying factors. Conditions typically include your Profession, current salary, future salary and the size of the loan you want to apply for.
Since the 2008 banking crisis and more recently Coronavirus, traditional mortgage lenders have become extremely cautious about who can qualify for a loan.
Which? magazine reports that 41% of young people applying for a mortgage are rejected. So anyway borrowers can get that extra edge when obtaining a Mortgage, should be considered.
Generally Professionals and young Professionals are looked at more favourably by Lenders because of their progressive salaries, and the most important factor, Job Security. We’re always going to need Doctors.
In most cases, borrowers are expected to pay between 10% of the value of the house as a deposit. Although lower, has been readily available in recent years.
According to MoneySuperMarket, the average deposit for first-time buyers in the UK is £50,174. That works out at around 22% of the average property value
Mortgages for Professionals – do I qualify?
- Chartered Surveyors
How much can I borrow?
Each case will be assessed on its own merits.
However, you should expect the amount you can borrow to be calculated on your deposit level, potential earnings, your outgoings, your career stability and the reliability of your income.
The greater your deposit, the less risk to the Lender. Which means in many cases, the greater your deposit is, the more you will be able to borrow.
In some cases you may be able to borrow up 5.5 times your future, fully qualified earnings.
What are the advantages of a Professional Mortgage?
1. You’ll generally be able to borrow more than those obtaining an ordinary Mortgage.
2. Some Lenders offer specialist rates available exclusively to Professionals and young Professionals, even those which aren’t yet fully qualified.
3. Greater chance of obtaining a Mortgage with a smaller deposit.
4. May be able to borrow more than you otherwise would with a small deposit as your future income will be considered.
5. VIP Service – some Lenders will provide you with your own Relationship Manager which can offer you other personalised banking services through them.
How to get a Professional Mortgage?
Specialist mortgages are designed for professionals that have invested a considerable amount of time and money studying to become an expert in their field.
To qualify for a professional mortgage, you will ordinarily need to be fully qualified, registered with a professional association and practising in your profession.
The qualifying criteria differ between lenders. For example, some lenders will consider applications from trainees.
Others will only accept professionals that are recently qualified in the last five years, and others insist your minimum salary must be £40,000.
There is, of course, some flexibility.
Applicants that can demonstrate job stability and a structured career path enhance your chances of securing a Mortgage. Speak with your employer to put a definitive career plan in place.
A reference to the Mortgage Lender may sometimes be sought, which can also help your case.
Can I get a Professional Mortgage with Bad Credit?
Yes, there are many specialist Mortgage Lenders that offer Professional Mortgages which also have friendly criteria toward applicants who have adverse credit.
Like with all areas of bad credit, acceptability will be dependent on the severity of the bad credit.
Like with Defaults, CCJ’s and Missed Payments acceptability will be dependent on the amount of adverse, when the event occurred, and whether or when the debt was repaid.
There are many other variables, so the best way to find out whether you’re likely to be accepted is by contacting a Specialist Mortgage Advisor with a copy of your Credit Report.
Are Professional Mortgages available to Self Employed?
Typically Professional Mortgages aren’t available to the Self Employed, this is mainly down to Lenders liking the security that an employed role offers. However, you may still be able to get some of the benefits, such as increased borrowing, if you are a Self Employed Professional.
Your level of borrowing will largely be dependent on the level of your earnings and your deposit. As a Self Employed individual your earnings will be calculated by using your businesses net profit or your salary and dividends.
If your assessable income is in excess of £50,000, up to 5 times your salary should be possible dependent on your deposit.
If your income is in excess of £75,000, up to 5.5 times your salary should be possible dependent on your deposit.
Are Professional Mortgages available to Contractors?
Typically Professional Mortgages aren’t available to Contractors, but Lenders have specialist criteria specifically for Contractors too which can help borrowers.
Day rate contractors will generally have their income calculated by taking their weekly gross (before tax and expenses) pay and times by 46 (weeks).
They may then be able to borrow up to 5 times their salaries if they earn over £60,000, subject to their deposits.
And up to 5.5 times their salaries if they earn over £75,000, subject to deposit size.
What deposit size will I need?
With a Professional Mortgage you will be able to obtain a Mortgage with a deposit as little as 5% of the property value.
It is important to try to put down more however, if possible. This will generally open up availability to more Lenders and cheaper Mortgages/rates.
If you have adverse credit, you may need a minimum deposit of 10-15% of the value of the property. Although this will be completely dependent on the severity of the adverse credit.
Key Professional Mortgage Lenders
Whilst a large number of Mortgage Lenders have preferential criteria and products available for Professionals. Some Lenders are particularly keen to attract Young and Experienced Professionals.
Some Lenders offer incentives such as Cashback and/or cheaper interest rates as well as all the other benefits Professional Mortgages offer.
Key Professional Mortgage Lenders include:
What Mortgage Lenders want to establish
Lenders are essentially looking for information that enables them to reasonably predict your long-term earnings and your ability to repay the loan.
For example, professional mortgages for doctors are normally deemed acceptable as they are usually in high demand and there is a clear path of earnings.
Professions that are funded by the public sector are considered to be more stable than private businesses and entrepreneurial start-ups.
Applicants should also include comments that prove you are dedicated to a professional career and have a clear path. Your Advisor will be able to package this in the best way to the Lender.
Are you a qualified professional looking to secure a mortgage? Contact us today and access thousands of professional mortgages with low interest rates.
Remortgages for Professionals
The obvious advantage to taking out a Professional Mortgage is the increase in borrowing capacity.
This can of course mean when you come to Remortgage that other lenders are still not available to you, if there are still affordability constraints for example.
Your Mortgage Advisor will check your existing Lender deals as well as new Remortgage options. And Professional Mortgages will still be available to applicants looking to Remortgage, including if you are looking to release monies from your property.
What documentation will Mortgage Lenders require?
Lenders want to check your income and outgoings as well as any relevant qualifications which will confirm your eligibility for a Professional Mortgage
Common documents will include:
Latest 3 Months Payslips
Latest 3 Months Bank Statements
Certificates or other confirmation of Qualifications or memberships of Professional bodies.
A copy of your employment contract
Simply have a question or need to get moving. Next steps?
Not all Mortgage Advisors will have the specialist knowledge or even deal with Professional Mortgages.
Speak to one of our qualified, regulated and highly rated Mortgage Advisors.
Simply complete our short Mortgage Enquiry form and we will get one Mortgage Advisor that is local to you and which specialises in your case, to give you a call. They can answer any other questions you have, provide you with a free non-obligatory quote and/or talk you through the process in greater detail.
If you’re a Contractor or have had Adverse Credit in the past, don’t worry, we can help. As a specialist in these areas, we have access to all Specialist Mortgage Lenders.
All our Mortgage Advisors hold the full CeMap qualification (Certificate of Mortgage Advice & Practice) and are regulated by the Financial Conduct Authority.
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