There are some excellent mortgage deals available to dentists, but you may need help finding and securing them.
Most mortgage lenders welcome the opportunity to lend to well-qualified professionals buying a home or re-mortgaging. But for dentists, it must sometimes feel as if they’re an exception to the rule – mortgage lenders’ systems often lack the flexibility to cope with the way they work and the way they’re paid. Meeting lenders’ application criteria can be challenging, and they may be rejected as a result.
The good news is that there are some excellent home loan products available to dentists, offering a generous amount of credit and competitive pricing. The majority of mortgage providers genuinely do want to lend to the dental profession. But you may need support from a specialist independent financial adviser to get the best possible deal.
Common mortgage traps for dentists
What is it about dentists that appears to worry mortgage lenders? Well, in practice, the nature of the profession gives rise to a number of issues that can set their alarm bells ringing.
One issue is that many dentists work as self employed individuals with varying level of remuneration, particularly when they’re at an early stage in their career. Mortgage lenders typically prefer making advances to borrowers in permanent employment roles with a good level of job security. If a would-be borrower is self employed, that can worry lenders, even if this is the norm in the dental profession and at certain stages of your career.
Another issue is that dentists often have complex income structures. They may have earnings from more than one source at the same time, or from both public- and private sector work. Their income may fluctuate over time, depending on their hours and how their schedule runs. It may be unpredictable as contracts change. Mortgage lenders find it difficult to account for this complexity in systems set up for more standard applications.
Another issue is dentists’ credit files. One of the most basic elements of your credit history is your home address, but for dentists who have moved house regularly, perhaps in line with their rotations, this information can cause concerns. Lenders look at your address history over the past six years, and are typically nervous about borrowers who have changed address very frequently, even though dentists have often had little choice but to do so.
Some dentists face particular challenges. For example, if you’re working as a locum, it is likely that your employment record is fragmented and lumpy – and your income has probably been more volatile. Equally, if you’re doing locum shifts on top of your normal job, it may not be easy to persuade lenders to take this additional income into account.
Elsewhere, younger dentists are more likely to have significant amounts of student debt to repay. This borrowing won’t count as debt when lenders are assessing your current borrowings, but the repayments you make each month will come into their affordability assessments.
Dentists from overseas working in the UK may also struggle. If you’re here on a Skilled Worker visa, there may be additional questions to answer about its duration and your history of renewing visas in the past. You may also lack financial history in the UK, making it more difficult for lenders to assess your application.
Overcoming the hurdles
The important thing to recognise is that none of these problems are insurmountable. It’s not that mortgage lenders regard dentists as inherently more risky to lend to than other borrowers – even young dentists or those from overseas. Indeed, they recognise dentists’ long-term earning potential and the significant demand for their services.
Rather, the issue is that in many cases, lenders’ systems just aren’t equipped to deal with non-standard applications. Most mortgage lenders have invested in automation and digitalisation technologies, enabling them to process larger numbers of applications more efficiently. But these IT structures often don’t cope well with applications that don’t fit the mould, or allow much room for human intervention.
This is why it often makes sense for dentists to apply for a mortgage through an independent adviser who understands the medical profession, rather than going direct to the lender yourself.
Advisers have more personal relationships with lenders, and know how to make your case in a way that gives you the best chance of securing a good deal. For example, they know how to bring all your income streams into the application, and how to ensure lenders don’t assume the worst because you’ve moved house several times.
Importantly, independent advisers also have a good understanding of which lenders are most likely to be competitive for your needs. They will know which mortgage providers have a good track record on accepting applications from dentists – as well as which provide the most attractive interest rates and mortgage features in the current marketplace. You may even find you have access to a better deal than those in other walks of life.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Content correct at the time of writing and is intended for general information only and should not be construed as advice.