As a mortgage adviser, I’m still baffled as to why certain medical professionals are incurring the same problem when trying to arrange a mortgage. Recently, a young couple, both successful junior doctors, were trying to purchase their first home together. They had saved up a healthy deposit and had no previous issues with credit. However, through no fault of their own, they found themselves with two failed mortgage applications, an estate agent threatening to pull their property unless they paid a £5,000 non-refundable deposit, and their previous financial adviser had seemingly vanished into thin air!
Why did it all go wrong?
You guessed it! One-half of the couple had started as a Locum just three months earlier!
You may have expected me to advise my clients to wait two years or look at a smaller property. What you are perhaps not expecting is that I was able to get them their full mortgage from a well-known high street lender, and this offer came the very same day the application was made!
What is the secret?
The secret is knowing that as a Locum, regardless of your employment type, whether employed, self-employed, agency or even through an umbrella company, each lender will make their own judgements about how to assess your income.
There are several misconceptions when it comes to a Locum wishing to apply for a mortgage:
| Misconception | Reality |
|---|---|
| You must have been working as a self-employed locum for at least two years to get a mortgage. | Depending on your contract, you could be offered a mortgage on the day you start a new role. |
| They won’t use all of your income to assess the mortgage affordability because it fluctuates. | Lenders can assess the affordability based on your full income, including shift allowances, unsociable hours and overtime. |
| I can only get a mortgage with a specialist lender at a higher interest rate. | Whilst it can indeed be more challenging to find the right lender, several high street names provide preferential treatment to locum workers at extremely competitive rates. |
Seek specialised mortgage advice
Although there will still be some self-employed roles that will require you to wait until you have 2-years of accounts, this isn’t always the case. Carrying out thorough research and having a high level of knowledge in this area is key, as there are a number of mortgage market misconceptions and vastly different treatment between lenders.
It is vital when looking into mortgage options you engage a specialist financial adviser who understands the intricacies associated with your profession. At Legal & Medical, we specialise in providing independent whole-of-market financial advice to medical professionals and we would love to hear from you. If you need help with your mortgage application or any other financial topic, please get in touch.
Please note that your ability to proceed with a mortgage is dependent on your own circumstances and personal situation, and is subject to changes based on lender policies. This article is based on our understanding at the time of writing and does not constitute advice.
Always remember your home may be repossessed if you do not keep up repayments on your mortgage.
Are you a Locum with a similar story to tell? Let us know by adding a comment below.