Dentist Mortgage

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Dentist Mortgage

Dentist Mortgage

Mortgages for dentists with Hemat Natha.

What is a dentist mortgage?

There isn’t a specific dentist mortgage product, but there are mortgage products for certain professionals who have a certain income class. Dentists are unique because they can earn income from various sources – so it helps to get specialist mortgage advice.

Lenders who provide mortgages to professionals will often take a view on a drop in income, a change in contract or a change from being an employee to being a limited company owner. They might accept just one year’s company accounts if a dentist has just become self-employed.

These professional mortgage ranges often stretch borrowing amounts, as well. So it’s best to come to us and let us understand the circumstances so we can advise you.

What are the eligibility criteria for obtaining a mortgage as a dentist?

We need to understand your income and how that is structured. For example, do you have a limited company? Are you operating in a partnership or are you a sole trader? How long have you been self-employed, or a contractor or employed? We’ll do all that on our initial call with you and then request appropriate documentation as proof of income.

Will my credit score and financial history impact my eligibility for a dentist mortgage?

Financial history does have an impact, so we need to understand how well you maintain your credit.

People often worry about their credit score but it’s actually more important to show well-maintained credit. This means you’re up to date with your monthly payments, you’re on the electoral roll and you haven’t missed any credit commitments. If you’ve got a store card and you haven’t missed any payments, that’s what lenders are looking for.

We ask all our customers to use Checkymyfile to get their credit report. It’s free for the first 30 days and gives you a snapshot of your credit history in the UK. It covers the main credit reference agencies. We’ll double check that, get affordability figures and take you through the rest of the journey.

Do I need to be a fully qualified dentist to be eligible for a mortgage?

No, you don’t need to be fully qualified, but you need to be in a job. You could be coming out of university and just qualified, as well. Let us understand the structure of your income because it comes down to that and your credit history.

If you’ve found a property you want to buy, we can go to a lender who offers professional mortgages and see if we’re able to stretch your income to get you the borrowing you need.

What documentation will I need to provide to the lender when applying for a mortgage as a dentist?

The documentation varies from customer to customer, depending on income structure. If you’re employed, it’s the standard three months’ payslips. If you’re self-employed in a limited company, we’ll ask for your company accounts, tax returns, tax calculations, and tax overviews.

Sometimes, depending on the lender, we’ll want an accountant’s certificate, but we’re more than happy to speak to accountants and take the hassle out of that process.

We’ll then ask for bank statements to confirm budgets, plus your identification. We’ll also ask for that Checkmyfile credit report. Then, when we apply for the mortgage, there will be no nasty surprises.

You won’t be left guessing whether it will go through or not. It’s going to because we’ve done the research behind it. Applying is just a formality.

Can a mortgage be used for buying a practice or a dental surgery?

So far, we’ve been referring to residential mortgage borrowing to purchase a home to live in.

We’ve got a current customer who has remortgaged their home to raise capital for business purposes – this was to purchase a dental practice. That’s one way to do it.

We can also do a mortgage on a commercial basis that your business will hold. That’s a whole other section. If you want a commercial mortgage to buy a dental surgery, that’s business finance – so definitely contact us. We can do that, but it’s a bit more in depth.

What are the advantages of a dentist’s mortgage compared to other types of mortgages?

A dentist is one of those professions that lenders like, where there is a certain type of income banding for that occupation. Lenders know that dentists are going to earn a certain amount. They have certainty of work, and lenders will, therefore, stretch the amount of borrowing. Some lenders will take a view on dips in profits or changes in income style. That’s where the real advantage is in being a dentist and applying for a professional mortgage.

Is a higher deposit required for a mortgage as a dentist?

No – you might even need less deposit than someone else.

What interest rates and fees can I expect for a mortgage as a dentist?

We’re recording this in October 2023 and rates are going up and down all the time, so I can’t quote anything. Speak to one of our advisors and they will look at your circumstances and let you know about rates.

In terms of fees, there are standard ones like mortgage arrangement fees, valuation fees, homebuyer surveys if you choose them, and if you’re buying your first home there are legal fees and stamp duty. If you’re remortgaging, we can get free legals.

Are there any specific lenders that specialise in offering mortgages to dentists?

There are a number of lenders that offer mortgages to professionals, which include dentists, and a fair few that understand dentists’ income structures, as we’ve talked about.

Can I get a mortgage as a dentist if I have existing student loan debt?

Yes, you definitely can. The monthly payment that you’re making towards the student debt counts as a commitment. Some lenders will want to know about your student debt and the contribution you’re making towards it.

With student loans, the higher your income, the bigger the deduction that is made. Lenders don’t generally ask what the total student loan amount is, but they certainly want to know how much the monthly payment is and whether it could have an impact on the affordability of your mortgage.

If your expenditure on commitments like that is quite high, it’s going to affect affordability and mortgage size.

What should I consider when comparing dentist mortgage offers from different lenders?

We’ve arranged mortgages for many dentists, and one interesting solution is an offset mortgage. This is where the savings balance offsets the mortgage balance. It reduces the interest payments on the mortgage, so you can pay it off sooner.

You also still can take money out of that savings pot for other things – perhaps buying a dental practice. The money is accessible. You could borrow more on your residential mortgage or inject a director’s loan into your business, do your home renovation. It’s all down to your individual situation, but we can give you some ideas and guide you on the pros and cons.

How long does the mortgage approval process typically take for a dentist?

We do all our research and get all the documentation to understand your circumstances upfront. So we won’t be throwing you against the wall to see if you’ll stick – we know you’ll stick.

We take the time to understand your circumstances to know what you’ll get. It means the approval process with us is a lot quicker. We’ll have done the affordability calculations, so applying is a formality. If there are things we need to do, we’re very proactive and will get it to the lender.

For example, I completed a mortgage for a friend, I was his best man at his wedding. We did it literally in two days because we had everything up front. We looked at the pros and cons of offset mortgages and took him through the process.

If we proactively work together and keep the communication channels open, we’ll get it through quickly.

Speak To An Expert

It doesn’t cost anything for a chat, it’s free and we never charge a fee until we’ve got a mortgage offer. So pick up the phone and let us take it from there.

Are there any specific tax benefits or incentives for dentists getting a mortgage?

I’ll leave that up to an accountant. We can refer you to specialists. There aren’t any tax benefits per say, but all good accountants handling dentists will be able to advise.

We’re mortgage and protection advisers, we’re not tax experts.

Are there any limitations or restrictions on using a dentist’s mortgage for other purposes such as a home renovation or debt consolidation?

You can borrow money on your residential home for a range of reasons – home renovations, debt consolidation, business purposes or buying an investment property.

There isn’t much restriction. Lenders may not like you to borrow money for certain reasons, which is part of their terms and conditions.

If you’re capital raising on your property, we need to understand why you want to borrow that additional money. We can ensure the lender is happy with it, but generally, there aren’t many limitations or restrictions.

Can I switch to a different mortgage product or lender once I have a mortgage as a dentist?

Most people know you have mortgage products lasting two, three, five, seven or ten years. There’s even a 30 year mortgage you can fix for. Those are product terms.

We’ll record the date your product term ends and contact you six months before to review whether it’s best to stay with your current lender or remortgage to a different one. We’ll look at the cost savings.

So, yes, you can take a different mortgage product when your product is due for expiry. If you’re thinking of moving home and selling your property, and you’re within a fixed term, you may be able to port the mortgage.

You might have a nice low rate – a couple of my clients still have 1.4% or 1.2% deals that expire in 2025. If they want to move before 2025, we can port those mortgages to keep that lower rate. We can then top up if they need to borrow anything further.

If your current lender’s rate is not competitive enough against the market, we can remortgage you to another lender, provided you’re eligible. That may save you quite a bit of money.

We could do this in many ways, but the key factor here is advice. We will look at the cost of many options to help you decide.

Can I port my dentist’s mortgage to another property if I decide to move?

Yes, you can. We will check the T&Cs, but most lenders allow you to port. If not, we will let you know. As another example, we are doing an interesting one when someone wants to keep their existing residential mortgage and port that over, but they also want to keep the property they used to live in. So we need a Let to Buy mortgage that ports their current deal onto their new home.

There are a lot of quirky things we can do. For these clients, it just made financial sense to retain their home for their children in the future.

What happens if I sell my property before the mortgage is fully paid off?

Just make sure that you’re not in an early repayment charge period. If you’re in a fixed deal and haven’t got another property to go to, you may have to pay an early repayment penalty.

But you can sell and pay off the mortgage early. You just need to look at the terms and conditions of your mortgage and check there are no early repayment charges.

How do I determine what loan amount I qualify for with a dentist’s mortgage?

Let us understand your income and credit commitments. We will do the affordability calculations across the many lenders and let you know what you can and can’t do.

It’s as simple as that. Clients share information with us and let us take them through that process.

What are the potential risks or drawbacks associated with a dentist mortgage?

There aren’t many drawbacks to obtaining a mortgage as a dentist. There may be quirks around your income, but we can advise and let you know.

Can I make extra repayments or pay off my dentist mortgage early without incurring penalties?

It depends if you’re on a tracker, offset mortgage or a product that allows you to make overpayments. If you’re out of a mortgage deal period, you can pay it off without any early repayment charges.

If you are in a deal period, we’ll review the early repayment charges and let you know. It might not be the right time.

We’ve got a client who isn’t selling their property until next March. The completion date has to be April 1 because they have a 3% early repayment charge of £21,000. They don’t want to waste £21,000 by selling now. [Podcast recorded in October 2023].

Similarly, we’ve got a landlord selling their property next August because there’s a £32,000 early repayment charge on their Buy to Let mortgage.

We can tell you about any repayment charge required if we’ve arranged your mortgage. If we haven’t arranged the mortgage, send us your mortgage file or offer, and we’ll check it out for you.

Are there any special considerations or requirements for self-employed dentists looking for a mortgage?

No, nothing other than what we’ve discussed here. Let us ask questions and we’ll take it from there.

Are there any alternatives to a dentist mortgage to consider?

Not really – but feel free to give us a call. Let us surprise you!

Your home may be repossessed if you do not keep up with your mortgage repayments.

Right to Buy is for tenants in England, Wales and Northern Ireland who rent their home from their local council.

It allows tenants who qualify, to buy their home at a discount.

The size of the discount varies depending on where you live and the type of property you want to buy.

Tenants who were living in a council home before it transferred to another landlord such as a housing association, might be eligible to buy their home under the ‘Preserved’ Right to Buy or Right to Acquire schemes.

Usually, tenants must have rented from the public sector (i.e., local council, housing association, armed services, NHS or foundation trust) for three years before they can buy under these schemes.

The three years can be non-consecutive. So, you could still qualify if you rented from the private sector between times when you rented from the public sector.

A concessionary purchase is a term for a property that is bought for less than its market value and, as you can probably guess, concessionary mortgages can be used to buy a property that’s sold at a discount.

Some concessionary mortgages are easier to get than others. Mortgages involving family members are much easier to get than if a buyer was purchasing from a private seller.

Here’s an example of how concessionary mortgages work. Imagine your parents want to help you onto the property ladder. To do so, they offer to sell you a property they own at a discounted price.

With the increase in property prices. The bank of mum, dad or even grandparents could come to the rescue. 

With this type of mortgage, a parent or close family member takes on some of the risk of the mortgage by acting as guarantor. If the homeowner misses a payment, this person is responsible for covering the missed payment. 

The main benefit of this type of mortgage is that you can sometimes borrow up to 100% of the property’s value as the guarantor’s collateral is used in place of a deposit. This can make them an attractive option for young people or lower earners.

On the negative side, your guarantor could be liable for any shortfall if your property has to be repossessed and sold.

The guarantor can’t be just anyone. Most lenders will require this person to be a close family member – usually a parent. 

Becoming a guarantor is a big commitment. The lender will either hold some of the guarantor’s savings in a locked account or take legal charge over a portion of their property to secure the mortgage.

Joint Borrower, Sole Proprietor (JBSP) JBSP mortgages are a type of mortgage where not all parties to the mortgage are the legal owners of the property. For instance, if there are two borrowers in this scenario, both will be liable for the mortgage but only one will be named on the title of the property.

These mortgages allow parents, guardians, friends or family to support would-be first time buyers with the affordability challenge of getting on the housing ladder. 

Shared ownership is where you buy a share of a home from the landlord, who is usually the council or a housing association, and rent the remaining share.

You need a mortgage to pay for your share, which can be between a quarter and three-quarters of the home’s full value.

You then pay a reduced rent on the share you don’t own.

Later you can choose to buy a bigger share in the property up to 100% of its value.

Eligibility restrictions on the shared ownership have lifted. You could buy a home through Help to Buy: Shared Ownership in England if:

• you have a household income of less than £80,000 (outside London) or £90,000 (inside London)

• you are a first-time buyer, you used to own a home but can’t afford to buy one now or own an existing shared ownership property but are looking to move.

Only military personnel get priority over other groups. The scheme will apply across England.

Why us?

Our Approach

Personalised – there is no ‘one size fits all’ when it comes to property advice. Your needs are not the same as anyone else’s and nor is our advice. We spend time getting to know you and your motivation for purchasing a property. 

Choice – we’re a mortgage broker, so we have the widest possible range of options. 

Technology and expertise – we use a combination of cutting-edge tech and 35 years of good old-fashioned financial expertise to find the right loan for your circumstances. 

Efficient – we admit it, we’re a little bit obsessed with streamlining. Our inspiration is Formula One – did you know that in 1950 a pitstop took 67 seconds? Today it takes 2. The difference? Organisation, training, and tools. We’ve learned from that and have streamlined our processes to get you into your property faster and hassle-free. Our case studies speak for ourselves!