Locum doctors are medical professionals who work on a temporary or freelance basis, often filling in for absent or unavailable doctors. They may work in different locations, settings, and specialities, depending on the demand and their availability.
Locum doctors can enjoy the benefits of flexibility, variety, and higher pay rates, but they may also face some challenges when it comes to applying for a mortgage.
Mortgage lenders typically require applicants to provide proof of income and stability, which can be harder for locum doctors who have irregular or fluctuating earnings. However, this does not mean that locum doctors cannot get a mortgage.
With the help of a specialist broker who understands the needs and circumstances of locum doctors, they can find a suitable mortgage deal that matches their income and affordability.
A broker can also advise locum doctors on the best way to present their income evidence, such as accounts, tax returns, payslips, contracts, or bank statements, depending on how they are paid and how long they have been working as a locum.
A Successful Locum Doctor Mortgage Application: Dr. Patel’s Story
Background: Dr. Patel is a dedicated locum doctor with two years of experience. She works across various hospitals and clinics, enjoying the flexibility and variety her role offers. However, when it came to buying her first home, Dr. Patel faced unique challenges due to her self-employed status.
The Journey:
- Financial Preparation:
- Dr. Patel started by organising her financial documents. She gathered her payslips, SA302 forms (provided by her accountant), and bank statements.
- She enlisted the help of a specialist medical accountant who understood locum earnings and tax implications. The accountant projected her annual income, which was crucial for mortgage lenders.
- Choosing the Right Lender:
- Dr. Patel worked with Doctors Mortgages, a mortgage broker experienced in handling locum applications.
- Her adviser at Doctors Mortgages recommended lenders who considered projections from her accountant. Not all lenders accept this approach, so their expertise was invaluable.
- Demonstrating Stability:
- Dr. Patel’s accountant provided a detailed projection of her earnings for the entire year, considering her fluctuating locum income.
- She maintained a good credit score by paying bills on time and managing her debts responsibly.
- Building a Strong Case:
- Dr. Patel presented her 3-year accounts and SA302 forms to demonstrate her financial stability.
- She kept meticulous records of her income and expenses, making it easier to provide evidence to lenders.
- Applying for the Mortgage:
- Dr. Patel worked closely with her mortgage adviser, ensuring they understood her locum journey.
- They chose a lender who had experience with locum applications and appreciated the accountant’s projections.
The Outcome:
- Dr. Patel secured a mortgage with competitive terms:
- Deposit: She saved diligently for a 15% deposit.
- Interest Rate: She opted for a fixed-rate mortgage.
- Loan Approval: The lender considered her projected income, and her strong financial case led to approval.
Key Takeaways:
- Specialist Advice: Seek advice from professionals who understand locum doctors’ financial complexities.
- Accountant’s Role: An accountant experienced in medical finances can be a game-changer.
- Record Keeping: Maintain accurate records of your earnings and expenses.
- Patience and Persistence: Dr. Patel’s journey took time, but her efforts paid off.
Remember, each locum’s situation is unique, but with the right approach and expert guidance, securing a mortgage as a locum doctor is achievable.
Disclaimer: This example is fictional, but it reflects common strategies used by locum doctors during mortgage applications. Always consult a mortgage adviser for personalised advice.
Here are some reviews from locum doctors with successful mortgage applications
5 Tips to Get a Mortgage as a Locum Doctor
1. Demonstrate Stable Income:
- Lenders want reassurance that you can afford your mortgage payments.
- Provide evidence of your consistent income, even if you’re self-employed.
- If you’re a sole trader, share your net profit from business accounts or your latest two self-assessment forms (SA302s).
- If you work through a limited company, consider both your salary and dividends.
- For PAYE locums, lenders will assess your payslips and P60. In most cases just 3 months payslips are required. These can be weekly or monthly payslips.
2. Build a Strong Employment History:
- Maintain a steady track record of locum work.
- Keep all your payslips to demonstrate consistent employment.
- Generally, lenders prefer at least a 12-month track history but this is not always the case. Doctors Mortgages can help locum's with just 3 months payslips.
3. Maintain a Good Credit Score:
- Your creditworthiness matters.
- Pay bills on time, manage debts responsibly, and avoid defaults.
- A healthy credit score improves your chances of mortgage approval.
4. Save for a Deposit:
- Start saving early for a deposit.
- A larger deposit can lead to better mortgage rates.
- Aim for at least 10% to 20% of the property value.
5. Seek Professional Advice:
- Speak to us at Doctors Mortgages, we are a specialist medical mortgage broker who understand locum doctors’ unique situations.
- We can guide you to lenders with a flexible approach for locums.
- We'll help you navigate potential pitfalls and find the right mortgage deal.
Remember, getting a mortgage as a locum doctor is achievable with the right guidance. Seek advice, compare rates, and take steps to strengthen your financial position.