For the last 9 months healthcare professionals have been at the centre of one of the biggest crises to hit the UK. Rightly praised, their dedication to their patients and to the NHS during the Covid-19 pandemic has never been in doubt. As we get used to what we are now increasingly calling ‘the new normal’ many of these healthcare professionals will be thinking about buying homes or remortgaging. However, if you are a GP, a nurse, a consultant, or another type of healthcare worker, you may find that it is not as simple as you hope.
Many healthcare professionals and NHS workers find that they require specialist help with mortgages for NHS staff so that they can secure the mortgage or remortgage they want. We’ve looked at some of the barriers to finding a mortgage for NHS workers, and what you can do to overcome them.
Irregular Hours & Shift Work
Often a key problem for healthcare professionals looking for a mortgage or a remortgage, is the pattern of shift work, irregular hours and overtime typical of their contracts of employment. Mortgage lenders like regular hours and steady incomes. These make it easier to calculate an applicant’s ability to meet their mortgage or remortgage payments.
If your salary fluctuates throughout the year, due to differences in the hours worked and the rates received for overtime, it is more difficult to demonstrate what a representative salary looks like for you. You may also find that lenders are reluctant to consider pay above your ‘usual’ base rate of salary. This can leave it looking as though you earn less than you actually do.
In these cases, it’s important that your income is represented accurately in order that lenders can make an informed decision regarding your application. It’s also worth noting that not all lenders have the same criteria, or calculate income in the same way, so it’s vital that you approach a lender who will understand your situation.
Additional Income Streams
The same considerations are applicable for those healthcare professionals who receive additional income on top of their main salary. This could be due to, for example, locum or private consultancy work. Some lenders will discount this income entirely, meaning that any calculation about your ability to afford a mortgage will only consider your ‘main’ source of income.
You will not only want to find a lender who will consider additional income when evaluating your application, but you should also ensure that you have clear and accurate records of all the income you receive.
Bank Nurses & Locum Doctors
Many doctors and nurses value the flexibility that comes from choosing to work through an agency as a bank nurse or a locum doctor. However, if you have decided to work in this way, you may again find it difficult to find a lender. In addition to the problems inherent in working irregular hours – as outlined above – you will be typically be working on short-term contracts, which lenders are cautious of, as they do not necessarily demonstrate stability of employment.
Identifying a lender who will, for example, take into account your previous years’ earnings in order to assess how much to lend you will make the process of application much more straightforward.
Doctors working in general practice are often partners in an LLP (Limited Liability Partnership), while others work as sole traders. Either way, it can be more complicated to find a suitable mortgage or remortgage than if you are in a salaried position.
The first step to successfully securing a mortgage deal is to ensure that all your accounts are up to date, and accurately record your income. It can be tempting for accountants to reduce your income or profits, quite legally, in order to minimise your tax liability, however when you come to apply for a mortgage this can mean that higher levels of loan will not be available to you. If you are thinking of mortgaging or remortgaging, then make sure that you speak to your accountant.
Once again approaching the right lender will help you to get the result you want.
How to make it easier
You’ve probably noticed a recurring theme by now. Namely that finding a lender who appreciates the circumstances of many healthcare professionals can make all the difference as to whether your mortgage or remortgage application is successful. A problem with identifying a suitable lender is that lenders’ criteria do not remain static.
Therefore, using a whole market mortgage broker who specialises in NHS, medical and unusual circumstance mortgages is important. They will know what lenders are likely to accept your circumstances, plus what deals are in the market or coming soon. With a range of ‘hero mortgages‘ launched by some lenders, many of them only available via brokers or from specialist non high street lenders, it really pays to have the right broker on your side.
Finally, brokers will do much of the leg work for you, including ensuring documents are accurate and submitted in time, so using one will also remove much of the stress associated with applying for a mortgage or remortgage. For busy healthcare professionals, this is particularly welcome.