Dentist Mortgage

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.