Mortgage for Dentists
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“We tailor our advice to you and manage everything with the lender from that initial application all the way through to your mortgage offer. Then we work with your solicitors right through to completion.”
Mike Haupt – Mortgage Adviser
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Mortgage for Dentists
Mike Haupt explains the mortgage process for dentists.
How do mortgages for dentists work?
It’s very similar to a normal mortgage process. It’s very much about understanding the circumstances of the person looking to get that mortgage.Where the real difference comes in is whether they are employed or self-employed. Do they qualify for the professional mortgage range, or do they just want to use the core mortgage range?
We will work to understand the individual circumstances and match them to the best lenders. Then it’s the typical process of application, valuation and mortgage offer.
What are the eligibility criteria for obtaining a mortgage as a dentist?
The lender will take into consideration your credit history, your affordability and how much deposit you’ve got. All those key criteria will still apply to a dentist or someone in any other profession.The main eligibility factor will be around whether you qualify for the professional mortgage range. We’ve done a podcast on this, so by all means go back and have a listen.
Professional mortgages can have more lenient criteria and you could get potentially higher income multiples. It’s about whether the core mortgage range is the right way to go or if it’s better to go down the professional mortgage route.
Will my credit score and financial history as a dentist impact my eligibility for a mortgage?
Yes, it will have a huge impact whether you’re a dentist or any other sort of professional. It’s always going to be about whether you have a good credit history, so that if they lend to you you can pay that money back.The main thing is making sure you hit the criteria for the lender, based on your credit history and your financial performance of the past. That’s what we will look at for you.
Do I need to be a fully qualified dentist to be eligible for a mortgage?
Not necessarily. The benefit of being a professional such as a dentist is that lenders have a much greater appreciation that training and progression take time. They will look to be as supportive as possible.You may still qualify for the professional mortgage range even as a trainee. If not, you’ve still got an incredibly competitive core mortgage range available to you.
There might be some subtle differences between the core range and the professional range but they’re still both good options. It’s not like you’re disadvantaged either way.
What documentation will I need to provide to the lender when applying for a mortgage as a dentist?
It’s the typical documentation – ID, pay slips or accounts if you’re self-employed. You will need proof of deposit, and bank statements.The one subtle difference is that if you are applying for the professional mortgage range, the lender may want to see professional qualifications. They may want to see that you’re an active dentist. Those details are lender-dependent and we would talk you through that in terms of the documentation needed.
Can a dentist use a mortgage for buying a practice or a dental surgery?
You can’t use a residential mortgage, but you could use a commercial mortgage. Residential lending is for property to live in, whereas commercial is for business.Are there any restrictions on using a dentist mortgage for other purposes such as renovations or debt consolidation?
No, it’s very much the normal criteria. There are certain things that you can borrow money for on your mortgage, such as home improvements, debt consolidation and personal goods like cars or holidays.
There are certain things that you can’t borrow money for – typically, business purposes and gambling. So all the normal criteria would apply to you. There’d be no difference for a dentist.
Is a higher deposit required for a mortgage as a dentist?
No. There are multiple factors that could impact you around the deposit. I will always advise you that the more deposit you can put in the better – you’re borrowing less money, so the mortgage costs you less to pay back.But there are other things involved – credit scoring can have an affect on how much deposit a lender may require. Affordability can affect it as well, to help you borrow as much as you need. The property type could also have an impact.
How do I determine the loan amount I can qualify for as a dentist?
It’s all down to the individual. The first thing we’d have a look at is your income. Whether you’re self-employed or employed, we need to know how much you’re earning.We also have a look at your outgoings – any student loans, debts, childcare… anything like that. We would work out how much you could borrow from there.
What interest rates and fees can I expect for a mortgage as a dentist?
With rates, it’s impossible to say. We’re here in April 2024 and potentially when you’re listening to this, interest rates from the Bank of England could be very different. So I can’t give you any details on that – they change every day.I can reassure you, though, that we would always be looking to make sure you get absolutely the most competitive rate and the most suitable mortgage for your individual circumstances.
There shouldn’t be any extra fees to pay as a dentist. You’ll have your typical broker fees for us to organise a mortgage for you. You’ll have your typical conveyancing fees, stamp duty if you’re buying a property and those kinds of things.
Are there any specific lenders that specialise in offering mortgages to dentists?
I’m lucky to work with 95 lenders at the moment and all of those will offer a core range of mortgages that are available to everybody. There are then a number of lenders that offer a professional mortgage range.Dentists qualify for those, so when we are looking for your mortgage we’d be weighing up the core range and the professional range to look at the most appropriate deal for you. But there are no mortgages designed specifically for dentists.
Does It Cost For An Initial Chat?
Please don’t be afraid to pick up the telephone. Contact us with any questions or any conversations you want to have. There’s no commitment, there’s no silly questions. I’m here to try and help put your mind at ease, so let’s have a conversation and answer your questions.
Can I get a mortgage as a dentist if I have student loan debt?
Absolutely. Student loans are nothing uncommon these days. If you are paying off your student loan it is factored into the affordability. You’d usually be making a payment directly through your pay.
If you’re not paying your student loan at the moment, it doesn’t get factored in. You can absolutely get a mortgage with a student loan in place.
What should I consider as a dentist when comparing mortgage offers from different lenders?
When I look at recommending a mortgage to somebody I look at the total amount payable over that period of time. So if we’re looking at a two-year fixed rate, we assess the total cost over that two years.
If it’s a five year deal we’ll compare the total cost over the five years. The lowest rate isn’t always the best mortgage. It’s about that total amount you’re going to pay back – that’s the figure to look at. Sometimes you can get lost in the headlines but the lowest rate isn’t always the most appropriate deal.
How long does the approval process typically take for a mortgage as a dentist?
It really shouldn’t be any longer, although there might be a couple of nuances as we go through it, such as specific paperwork for a professional mortgage.
The process is that we apply for the mortgage, valuations take place and the lender does all the final checks, then you get your mortgage offer. Typically that process can take anywhere from a few days up to a few weeks. It can really vary depending on the lender and the circumstances. But there shouldn’t be any undue delays because you are a dentist.
Are there any specific tax benefits or incentives for dentists looking to get a mortgage?
I can’t really comment because obviously I’m not a tax specialist. Talk to your accountant and they will be able to help you out.
Can I get a Buy to Let mortgage as a dentist?
Yes, absolutely no issues there. You will typically need a 20% to 25% deposit but if you have that, there should be no problems at all.
Can I get a dentist mortgage if I have bad credit?
Having bad credit doesn’t mean you can’t have a mortgage. There are big misconceptions out there about that. But specific lenders will work with people who are ‘credit-impaired’ – although I’m not a fan of that phrase.
These lenders will help if you’ve had missed payments, late payments CCJs, an IVA or things like that. It would just be about understanding your circumstances and finding the best lender for you based on that.
Can I switch to a different mortgage product or lender once I have a mortgage as a dentist?
Yes. if we assume that you are coming to the end of your fixed rate deal, for example, we would get back in contact with you and look at the options. We’ll look at staying with your current lender or moving to another lender.
If you took a professional mortgage out to start with, it doesn’t mean that you have to take another professional mortgage next time. We look afresh at the situation and decide what’s best for you now.
If you decide to try and move your mortgage in the middle of a fixed rate deal, there may well be some penalties to pay to get out of that mortgage. We would help you decide if it was the appropriate thing to do.
What happens if I sell my property before the mortgage is fully paid off?
The first thing I do in that situation with a client in any other profession, is look at the options. We’ll look at whether you could port your existing mortgage or whether it’s more beneficial to repay the existing mortgage and start again with a completely new mortgage.
Again it could be with the same lender or a different one. We would explore the options depending on your circumstances.
Can I port my mortgage as a dentist to a new property if I decide to move?
Yes. Normal criteria would apply – you’d still need to meet the lender’s credit scoring and affordability assessments. Assuming you did, then yes, you could port your mortgage to the new property.
Can I make extra repayments or pay off my mortgage early without incurring penalties?
With the extra payments, yes, about 99% of mortgages now come with an overpayment facility. Typically you can overpay around 10% of the outstanding balance per year. Some lenders such as NatWest allow you to make overpayments of up to 20% per year with no penalty.
If you were to pay your mortgage off in full, there may be a penalty depending if you’re in the middle of a fixed rate or tracker deal. In most cases there will be penalties for paying your mortgage off in full early.
If you happen to be on the standard variable rate you can pay the mortgage back in full with no penalties whatsoever. So if you’re planning to do that, pick up the phone and let’s have a conversation. We’ll check you have the right plan in terms of what you’re going to do and when.
Are there any special considerations or requirements for self-employed dentists looking to get a mortgage?
This is really quite an important question. Some dentists are employed and others are self-employed. Some of them are in a partnership.
There’s lots of different ways that you can be employed as a dentist. If you are self-employed, we would take the normal self-employed approach, and either use your accounts and share of net profit or your personal tax returns.
There are no specific considerations – it would be down to the right thing for you and the lender’s criteria. Ultimately it’s about making sure we can lend you the amount of money you need to buy or remortgage a property.
What are the pros and cons associated with getting a mortgage as a dentist?
The pros obviously are that you end up with a house, or hopefully a cheaper mortgage. There aren’t really any specific cons outside of the normal house buying process and the commitments that come with that.
The main challenge as a dentist is to weigh up the difference between the core mortgage range from a lender and the professional mortgage range.
How can a mortgage broker help me obtain a mortgage as a dentist?
Hopefully I’ve demonstrated that there’s quite a lot to consider. The key part is that knowledge of the market and the mortgage options out there. That’s where I can really help you find the right lender to fit your circumstances.
Having access to that professional mortgage range can make a massive difference in terms of getting your mortgage approved and buying or re-remortgaging your home.
As I always say, if there’s anything you’d like to talk through, just pick up the telephone or drop me an email and we can have a conversation and run through it all.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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- We believe in building lasting relationships with our clients. The kind where we get to know you, your family, how you live, what's important to you and what you want in the future.
- Then we get to work to help you achieve it, with regular reviews and updates, to keep your money working harder and smarter for you.
- We don't want to be the biggest, we want to be the best, for you and your family.
Because we play by the book we want to tell you that…
- Your home may be repossessed if you do not keep up repayments on your mortgage.
- There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
- The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.