5 things you need to get a mortgage as a Locum GP
Getting a mortgage as a locum GP might seem more complicated but once you understand what’s required by lenders it should make life a lot easier. MyLocumManager helps locum GPs track and record their income, expenses and financial data. When applying for a mortgage as a locum, this information will help the application process. There are additional things you may also need. David Hollingworth from London and Country, the UKs largest fee-free broker is our guest blogger on this all important issue.
What do I need to prepare before applying for a mortgage?
Do your budgeting so that you are clear on the different costs of buying your new property, accounting for costs including survey fees, legal costs and stamp duty. That will help you work out the deposit that you will have and the amount of mortgage you will require.
Lenders will credit check and credit score your application, so it can make sense to check your credit file. Having credit isn’t necessarily a problem as long as it is managed well. Lenders will like to see a good profile so make sure that you’ve taken simple steps to help achieve this such as registering on the electoral roll.
Why might being a locum make getting a mortgage harder?
Mortgage lenders need to be able to demonstrate that a borrower will be able to afford the mortgage now and in the future. As a result all lenders will need to see evidence of your income. That’s easy to show if you are in full time employment but can be harder if you are self employed.
As self employed borrowers can have fluctuating income rather than a basic salary, mortgage lenders will want to see evidence of income over a longer period of time.
What will lenders need to prove income?
They will need evidence of track record for self employed borrowers and that will typically mean producing two years of accounts or self assessment. Lenders will be looking at net profit figures for a sole trader. In the case of a limited company director then they will typically look at salary plus dividends.
It therefore makes sense to keep on top of your paperwork and make sure that you have the latest two years of accounts ready. Alternatively your lender may accept the latest two self assessment forms, which are referred to as SA302s and are available from HMRC.
Typical documents you may also need include:
- 3 months of invoices/payslips
- 3 years of accounts and or SA302’s if you are self employed (your accountant can help you get these)
- latest 3 months bank statements
What if I don’t have two years track record?
Some lenders can be a little more flexible and may be able to consider someone with only 1 year of accounts. It will narrow the choice so rates may be higher than some of the best on the market but it may still be possible to secure a mortgage.
Some lenders such as Scottish Widows Bank and Saffron Building Society offer mortgages aimed at professionals. They may have a better understanding and be more flexible in approach, so might even consider a situation where the borrower has only recently become a locum having previously been employed for example. Advice will help to find the right lender to suit your needs.
What else do I need to know?
Like any other borrower you will then need to decide what type of mortgage deal you want. You can choose from a fixed rate, so you know what your monthly payments will be for a specified period or you could opt for a variable deal that can go up or down as rates change.
Also consider how long you want to lock into a deal as most mortgage products will tie you in with early repayment charges during the scheme. Don’t just look at the headline interest rate either as some deals carry significant fees which can erode the overall value of a deal depending on your individual requirements.