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The Ultimate guide to Junior Doctor Mortgages

The Definitive guide to getting Junior Doctor Mortgages.

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Getting A Mortgage As A Junior Doctor

As a Junior Doctor you may struggle to get a mortgage with some lenders. Quite often you may apply for a mortgage but when it comes to getting your mortgage offer the lender may inform you that they cannot offer your mortgage.

This is down to a number of reasons, the most common being the fixed term contracts that Junior doctors often find themselves on. It is really common for medical professionals to find themselves on Fixed term contracts throughout their medical careers, however, in the early days it is incredibly commonplace.

How Much Mortgage Can A Junior Doctor Get?

A Junior doctor mortgage may allow you to borrow more than a standard mortgage. This is because at the start of your career you will be earning less, but this will almost certainly increase over time.

Lenders are aware of this, and some will lend you more as they know your income will increase steadily. When calculating a junior doctor mortgage some lenders may potentially allow you to borrow up to 6 times your income. However, this is the absolute maximum for a junior doctor mortgage, and if you want to know exactly how much you can borrow you should consult a specialist nhs mortgage advisor. If you need a ballpark figure you can check out our NHS mortgage calculator.

Can A Junior Doctor With Bad Credit Get A Mortgage?

You can often get a Junior Doctor Mortgage even with bad credit. Your credit history is always looked at during a mortgage application. However, depending on the severity and the length of time since it happened, you may still have options.

When assessing your bad credit a lender will likely consider:

  • How long ago it was
  • If it has been paid off
  • How much was it for?
Things that may affect your ability to get  a mortgage include:
  • Defaults
  • CCJs
  • Missed payments/arrears on secured/unsecured loans or credit agreements
  • Debt Management plans
  • IVAs
  • Bankruptcy

Mortgages For Newly Qualified Doctors

Newly qualified or even trainee doctors may be able to get a junior doctor mortgage. If you are Newly Qualified you may be able to get a mortgage before your first position has even started.

As a trainee you may receive a stipend or bursary, this income can often also be used toward your affordability.

Can You Get A Mortgage As A Junior Doctor?

Getting Junior Doctor Mortgages can be difficult, however, it is not impossible. The biggest challenge is generally the fixed term contract associated with being a Junior Doctor. We cover this at length above.

The second thing that can be a challenge for a Junior Doctor is the variable pay parts of your income. As a medical professional you may find that your income is made up of a few different rates. For example Night pay, or overtime.

Some lenders may not take 100% of these additional pay rates when working out how much you can borrow. This can drastically lower the maximum loan available.

Do Doctors Get Better Mortgages?

Doctors can potentially get specialist mortgages for Professionals. This doesn’t necessarily make them better than other mortgages. For example they may let you borrow more, but have a higher rate of interest.

This may be advantageous if you want to borrow a higher amount, but if you don’t need a higher income multiple this would potentially cost you more in interest.

Can Medical Students Get A Mortgage?

Whilst you are studying you may still be able to get a mortgage. If you are in receipt of a grant, stipend or bursary you may be able to use this income to get a mortgage. Therefore you can get a mortgage before you qualify.

Sometimes whilst you are training you may receive some income, this could also be used toward affordability for your mortgage. If you think you may receive some sort of income whilst training, whether from a stipend or from a salary, speak to a specialist NHS mortgage broker to discuss your options.

Can Doctors Borrow More Money?

Doctors, even Junior Doctors, can potentially borrow more money. This is because Professional mortgages allow for the increases to your salary in the future.

It may not always be in your best interest to go for one of these products, so always speak to a professional to go through your options.

Junior Doctor Mortgages On Fixed Term Contracts

Fixed Term contracts are very commonplace for a Junior Doctor. Different lenders will view this differently. Some may want a long history of fixed term contracts. Others may want you to have 3 or 6 months left on your current contract.

The good news is for a junior doctor mortgage there are lenders available that will accept your fixed term contract straight away, possibly before you even receive your first payslip! You should always consult a specialist NHS mortgage advisor to discuss your options for a junior doctor mortgage as they can be complex.

Common Types Of Junior Doctor Mortgages

Fixed Rate Mortgages

Fixed rate mortgages are the most common type of mortgage for a residential mortgage. Essentially the rate of interest is fixed for a set amount of time, usually 2, 3 or 5 years.

This means that your monthly payments are also fixed for that period. This is usually preferable for most people that want to know what their monthly outgoings are going to be.

This type of mortgage often has an early repayment charge if you try and leave during the fixed rate period.

Variable Rate Mortgages

Variable rate mortgages will usually go up or down depending on either the lenders standard variable rate or possibly the Bank of England base rate.

This type of mortgage often doesn’t have an early repayment charge. Making it a lot more flexible than a fixed rate mortgage. However, there is also the risk that interest rates could increase.

Home Buying Schemes For Junior Doctors

Shared Ownership Scheme

The Shared ownership scheme lets you part rent, and part buy your home. This can be beneficial for Junior doctors who start off on a low income, but have regular pay increases.

This way you can buy a larger home with a smaller income or deposit, and over time buy more shares of the property.

Help To Buy Scheme

The Help to Buy scheme is probably the most well known of all the schemes. It allows you to get up to 20% equity loan on an eligible new build property. Allowing you to put down a 5% deposit and get a smaller, 75% mortgage. This means you can often secure a better interest rate as it is a lower loan amount.

This scheme is open to First time buyers currently. Unfortunately the Help to Buy scheme will close to new applications in October 2022.

First Homes Scheme

This is the newest scheme of the three, and isn’t widely available yet. However, it was created for First time buyers and Key workers. As doctors, a Junior Doctor certainly counts as a Key worker.

The Government First Homes scheme offers a minimum 30% discount on eligible new build properties. This saving is then passed on when you sell the property, to the next buyer.

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