Article by Jamie Mackenzie Smith - 14th September 2018

Am I More Likely To Get A Professional Mortgage?

Before the Credit Crunch of 10 years ago, finding a mortgage valued up to 95% or even 100% LTV and at more than five times your salary level wasn’t difficult - in fact it’s since become clear that it was too easy and was a financial disaster waiting to happen. As such, mortgages have become harder to get accepted for then, with stricter regulations coming into place ensuring that mortgages are only granted to those who can truly afford them.

But 10 years on, you can find a few examples of mortgage lenders offering pre-recession level rates in the form of their Professional Mortgages. But are they safe or advisable?

What are professional mortgages?

Professional Mortgages are mortgage products only available to people recently qualified in certain vocations - though in some circumstances trainees may also be granted a mortgage. The job titles required will differ slightly for each mortgage lender (as indeed will the offers themselves) but the lists usually include barristers, solicitors, teachers, doctors and vets.

The common theme across these jobs is that they require professional qualifications that carry the implication that this is in fact a career and not something that may change every few years.

In simple terms, the employment types that these specialist mortgages are designed for are seen as providing a long-term career with a steady and reasonable income that is less likely to change. That means that lenders can feel confident that the borrower should remain employed and as a result are less likely to have trouble making repayments. It’s also likely that lenders are keen to appeal to young professionals in an effort to buck the trend of declining mortgage application numbers from under 30s.

Professional Mortgages are available from a number of mortgage lenders including (but not limited to) Clydesdale Bank, Scottish Widows, Saffron Building Society and Teachers Building Society, which also offers a range of savings and mortgage products specifically for teachers.

Example of a Professional Mortgage

Clydesdale Bank will offer as much as five and a half times the applicant’s income and 95% LTV for a property with a maximum value of £600,000. To be considered for one of these mortgages applicants will need to be earning £40,000 or more per year, as well as being recently qualified (within the last five years) for one of the following occupations:

  • Accountants
  • Architects
  • Barristers
  • Chartered Surveyors
  • Dentists
  • Medical Doctors
  • Pharmacists
  • Pilots
  • Solicitors
  • Vets

Do I need a professional mortgage?

One of the reasons these lenders are happy to offer a mortgage to certain professions is that they feel it adds a certain level of financial protection for them. Most mainstream lenders simply look at the here and now and are unlikely to take into account the qualifications obtained by an individual and how it might impact their future income.

However, if you’ve already started in your profession and are earning a reasonable amount, you may not have trouble passing affordability checks from mainstream mortgage lenders, which means you can shop around for the best rate.

Some mortgage lenders may also be more flexible than you might expect - creating mortgage deals tailored to an individual’s circumstances, which could include taking into account career paths and projected earnings.

The main benefit of a professional mortgage is to gain access to higher LTV rates and income multipliers, allowing young professionals to experience what they have worked hard towards a little bit earlier - all of which are fine provided repayments are made on time. If the applicant fancied a career change or to switch to a potentially less stressful yet lower paid job in the future, they would still be expected to make these repayments.

A key consideration of course is the product itself and the rate plus any fees. There’s no guarantee at all that a professional mortgage will be cheaper than a mainstream product, so it’s always important to shop around and see what else is out there.

Does my occupation guarantee me a mortgage?

Without question professional mortgages can be helpful to people just starting out in certain occupations, but by no means are you guaranteed a mortgage by the simple virtue of being newly qualified in a potentially lucrative industry.

Outside of the vocational analysis that might be offered by a professional mortgage underwriter, the rest of the application process will be very similar to that of any other form of mortgage, which means the information on your Credit Report plays a key role in whether or not you will be accepted for a mortgage.

For newly qualified professionals in particular, if they have not had much of a credit history leading up to this point they may struggle to prove their overall Creditworthiness, which is a large factor in an underwriter’s decision. A credit history showing adverse information such as late payments, serious arrears or even court information is also likely to put a large spanner in the works and give the lender in question serious doubts about your ability to pay on time.

As with any type of mortgage application we’d strongly urge anyone to check their Credit Report ahead of making an application – it’s the only way to see what you’ll be assessed on and it’ll let you spot and fix any errors ahead of time, giving you the best chance of getting accepted.

You may even find that by checking the information on your Credit Report is correct and that you’ve got a good payment history, your report can help you get a better deal on your mortgage.

checkmyfile offers the UK’s most detailed Credit Report, with data from 4 Credit Reference Agencies, not just 1, which means you’ll see more information than anywhere else. You can try checkmyfile free for 30 days, then for just £14.99 a month afterwards, which you cancel online, by phone or by secure message. You’ll get complete access to your report, along with support from our professionally-qualified Credit Analysts who will help along the way.

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