One of the most common questions from a professional is “Am I eligible for a better mortgage deal?” The short answer is more often than not banks and buildings societies do a special range of Mortgage Products for Professionals.
High Street Banks categorize applicants in certain professions as low risk because of the qualifications, stability of income, and career progression prospects. Examples are a dentist or doctor who has a guaranteed block of income from the NHS, or trainee and newly qualified solicitors who may accelerate once the training completes.
Some Banks offer discounted mortgage products with a lower interest rate as a part of their exclusive professional mortgage range. The professional mortgage range may have additional benefits that are not offered on the standard mortgages range.
Benefits of a Professional Mortgage
- Professional Mortgage applications may be individually assessed rather than sticking to a rigid formula.
- Processing times may be faster as certain professions may be less risky from an underwriting point of view especially if income is more or less guaranteed.
- Professionals may be eligible for a reduced initial interest rate or lower product fee
- Certain Banks allow professionals to put down a lesser deposit or allow a higher loan to value (LTV)
- Professionals will be eligible to borrow more since certain banks offer higher multiples on borrowing
Some professional mortgages offer an overpayment facility of 20% per year without an early repayment charge. As long as you paid a certain amount to date, you may be able to apply for mortgage holidays. There are Banks who accept self-employed professionals with even one-year history, as opposed to 3 years accounts for most self-employed.
Careers that are considered as professionals
An individual who is qualified, registered, practicing your profession and a member of the professional body will be considered as Professionals. Please see the below list of examples of professionals that banks consider for a professional mortgage.
- Medical doctors
- Police officers
- Civil servants
- Officers in the armed forces
- Trainee Professional Mortgages
Some Banks also consider trainee professionals such as trainee accountants, trainee actuaries and trainee solicitors to be eligible for a professional mortgage.
Some professionals such as doctors work as locums. They may not qualify for a professional mortgage range. However, banks and building societies can be flexible with professionals such as locum doctors given their earning capacity.
Some locums such as doctors will work through an umbrella company or is on a fixed-term contract. Banks have come up with ways of assessing locum professionals.
A New Breed of Professional Mortgages
The list above of professionals is very traditional. However, in today’s fast-changing world there are many high paid low-risk professions that have emerged. Banks and building societies are starting to consider these professions too.
Examples include IT professionals, engineers, or consultants. Some work through a company instead of being on the payroll and work as contractors. For this type of professional, contractor mortgages may be used. Day rate contractors or hour rate contractor’s income is assessed differently to typical the self-employed route.
Some of these professionals’ work through umbrella companies or they work as fixed-term contractors. This may be due to changes in legislation in relation to IR35. Banks will consider them too.
Independent mortgage advisers specialize in providing expert mortgage advice for professionals to help them find a mortgage. They take the time to understand your situation and recommend the most suitable solution. They would take care of the full application process from start to finish, so you can find the right mortgage as simply as possible.
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