Professional Mortgages: How Mortgages For Professionals Work
A professional mortgage may offer enhanced terms to those within certain professional occupations. Flexibility on affordability, loan amounts and deposits are all potential benefits of mortgages for professionals.
If you have trained for years, found a great job with great prospects and your long-term income will support a mortgage, you should expect to be able to find a mortgage. Professionals in this situation can also explore the option of mortgages for professionals that provide extended benefits or flexibility to traditional mortgages to support your journey to becoming fully qualified in a professional role.
What is a professional mortgage?
Professional mortgages offer enhanced terms to borrowers in certain occupations. This could include a more flexible approach to affordability, or a willingness to lend a greater multiple of your income than standard. Mortgages for professionals may even enable you to buy a home with a smaller deposit.
This can be particularly helpful for those in the early stages of their career who may not currently be earning huge sums but can expect to see their earnings grow in the future.
Who can get a professional mortgage?
Typically, to be eligible for a professional mortgage you will need to be in an occupation that requires a formal and recognised qualification.
Exactly which occupations different lenders consider to be ‘professional’ varies, but are likely to include:
- chartered surveyors
- commercial pilots
- medical doctors
Exact eligibility criteria will vary between lenders. For example, some deals for newly qualified professionals might stipulate that you must have qualified within a specific time frame, while others may accept applicants while they are still in training.
» MORE: How mortgage lenders work
How do professional mortgages work?
Professional mortgages operate like other standard mortgages. The key difference is the underwriting approach – that is the criteria and the considerations that the lender makes before deciding whether or not to offer a borrower a loan. It will also affect the amount they will be able to lend.
Professional mortgages are likely to use trained underwriters to assess applications, rather than a computer. These manual underwriters can make decisions on a case-by-case basis.
When assessing borrowers’ applications, underwriters will take the specific occupation into account and consider factors such as job security and earnings potential before agreeing or dismissing a loan.
As a result of this different underwriting process, you may be able to get a loan that other lenders would not have offered and you may be able to borrow more.
Most lenders will typically lend up to 4.5 times your salary. However, with a professional mortgage you may be able to increase that to five or 5.5 times your salary. Some brokers even claim to be able to find mortgages for doctors at six times their salary.
» MORE: What size mortgage can I afford?
What sort of professional mortgages are available?
You can choose to have a fixed- or variable rate mortgage, as with standard mortgages – though you may find that they have more flexibility with a professional mortgage.
If repaying your mortgage as fast as possible is a priority and you are likely to have lump sums, which you can use to pay it down, some professional mortgages allow you to make larger overpayments than standard residential mortgages.
Will a professional mortgage get me a better deal?
Professional mortgages may not offer the cheapest rates on the market. The difference is that you may be able to get a loan that other lenders will have turned down, or borrow more than you could otherwise get.
Whether an ordinary or professional mortgage makes sense will depend on your occupation, what stage you’re at in your career, your earnings and your wider financial circumstances.
As such, it makes sense to consult an independent mortgage broker who will be able to track down the right lender and deal for you.
In some cases, there may be standard lenders that are happy to extend some discretion when underwriting borrowers in certain occupations because they know that they will not struggle to find work and are likely to enjoy good earnings progression. A broker will know which lenders are likely to be the most flexible.
» COMPARE: Mortgage deals
How to apply for a professional mortgage
Professional mortgages are available from a range of specialist lenders and are often only available through mortgage brokers, who will apply for the loan on your behalf.
This can be helpful as it ensures you don’t apply for a professional mortgage just because you have one of the listed occupations. It ensures you get the right deal for you, whether it is a professional mortgage or not.
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Rachel Lacey is freelance journalist with 20 years experience. She specialises in personal finance and retirement planning and is passionate about simplifying money matters for all. Read more
Tim draws on 20 years’ experience at Moneyfacts, Virgin Money and Future to pen articles that always put consumers’ interests first. He has particular expertise in mortgages, pensions and savings. Read more