Getting a mortgage as a locum
The average age of our locums on locumorganiser.com is early 30s. Many of our members are settling down or thinking of starting a family and house hunting is quite a common theme.
The majority of locum home buyers will need a mortgage, but how do you get a mortgage as a locum? What do you need to provide, and what are some of the hurdles you may encounter?
We asked Lawrence Robbins, Partner at Locum and Professional mortgage specialists amortgagenow.co.uk for some key tips for our members.
Is it possible to get a mortgage as a locum?
Yes, it is, but there are some specific hurdles.
In todays mortgage market every mortgage application needs to be considered carefully by the Lender using a process agreed with the Regulator. There is little room for shortcuts and therefore income will need to be proven, this is generally the trickiest element for the locum applicant.
What information will I need to provide?
You should expect to prove your identity, home address, income, credit history, outgoings, and deposit. In practice this means that the Lender will ask you to provide some or all of the following:
- ID – driving licence, current passport, or both, and VISA if applicable
- Proof of address – up to 2 recent utility bills or credit card statements
- Credit history – Lenders will pick this up automatically from one of the three main credit reference agencies
- Outgoings – between three and six months personal bank statements
- Deposit – proof of availability of your deposit either from bank statements, or a letter of gift if you are getting help with the funds
How far back must my accounts go?
The majority of Lenders will expect to see two or three years trading history for the self-employed locum, some will consider a case based on your first years figures.
What kind of deals are available for locums?
Locums can expect to obtain competitive mortgage deals close to the the market leaders. Although underwriting income can be tricky, this does not effect the rate offered.
Locums with a patchy credit history may find this is reflected in the deals available to them.
Will an offer be based on my tax returns?
Your tax returns are the simplest way to prove your income. Nearly all Lenders are happy to underwrite based on SA302s and Tax Year Overviews covering the last 3 tax years (sometimes one or two years).
An SA302 is a statement from HMRC outlining your declared income for the tax year, and the tax payable against that income. These are available to download from the HRMC website or can be requested on the telephone. Most Lenders will also accept your Accountants tax calculation figures.
Tax Year Overviews are statements of your tax account confirming that the Income Tax Bill has been settled. These are also available online or by telephone from HRMC.
Locums in their first year of trading can only give a projection of what they are likely to earn annually.
In these circumstances, certain mortgage Lenders can sometimes assist a first year locum based on the first six months trading figures and a projection going forward. You will need to work with a specialist mortgage broker to obtain lending in these circumstances.
Help to Buy mortgages and Locums
Under the current Help to Buy scheme, the Government will advance an interest free loan of up to 20% towards the purchase price of a newly built property (up to 40% in London Boroughs).
Locums with at least one years trading figures can access mortgages for these schemes.
Mortgages for locums with a poor credit history
If you have a patchy credit history, for example due to issues from your time as a student, your case will need especially careful handling.
As a first point obtain a copy of your statutory credit report from all three main credit reference agencies:
We suggest all three as data can differ between providers.
These statutory reports are available for a maximum £2 each. You do not need to sign up for a subscription.
When you need a mortgage?
Get your support information together as listed above, then get some specialist help.