Mortgages for Professionals
Here at Davidson Deem, we specialise in a large range of mortgages including mortgages for professionals, which more and more mortgage lenders are now offering. We can help our clients find the best mortgage rates using a fee-free service for mortgages above £100,000. For assistance in receiving the right mortgage for your needs, please do not hesitate to call us on 01202 884 111, where you will deal with the same mortgage director throughout your entire mortgage application to ensure the application process is as easy and stress-free as possible.
What are Professional Mortgages?
Mortgages for professionals are new mortgages that have been launched to allow people in certain job professions to get a better mortgage rate. Professional mortgages tend to offer more favourable loans in that you can receive more, pay lower interest rates and the lender will usually consider future income when they calculate your professional mortgage.
Mortgages for professionals were created with the logic that people in certain careers have a more reliable job position in addition to career progression which will see continuous pay rises, therefore, these professionals are seen as less risk to mortgage providers.
Who is Eligible for a Professional Mortgage?
Professional mortgages are only given to those in certain careers. You will need to be aged between 21 and 70 and fully qualified within the profession to be eligible for mortgages for professionals. Some lenders may consider people who are trainees within the profession.
Professions that are eligible for a professional mortgage are:
- Armed Forces Officers
- Civil Servants
- Police Officers
The mortgages for professionals are offered to these professionals on the basis that they have qualified within the last five years.
Benefits of Professional Mortgages
Mortgages that are offered to professionals can be very beneficial if you’re eligible. The standard mortgage loan would usually be four times the applicant’s salary up to a maximum of four and a half times their salary. With mortgages for professionals, the applicant gets access to a larger loan rate; you could receive up to five and a half times your salary in addition to a 95% loan to value ratio. If there is a joint applicant on the mortgage who isn’t a professional, they will be subject to the normal terms of mortgages and will be able to receive around four times their annual salary.
Mortgages for professionals don’t just offer large loan rates, you can also benefit from:
- Lower interest repayment rates
- Being able to borrow more on a lower starting income as the lender will consider your future earnings and pay progression
- Getting a mortgage with a lower deposit and a higher loan to value ratio as a professional is seen as more trustworthy to reliably make the repayments
- Lenders who offer professional mortgages have specialist knowledge in the field and know that many of these professionals can receive unpredictable bonus income, therefore, they can ensure that there is specialist underwriting within your mortgage contract that can accommodate the extra income
- Applications are usually individually assessed rather than using a formula to determine how much you can borrow
- Flexible repayment options that allow you to take breaks from your payments or make larger repayments to reduce interest rates and the term of your mortgage
How do Professional Mortgages Work?
Professional mortgages work similarly to a mortgage for any other kind of individual. However, as previously mentioned, mortgages for professionals provide greater benefits and more flexibility within the process. A standard mortgage will have a repayment period usually between 25-35 years, whereas, a professional mortgage allows a repayment period of as little as five years to forty years depending on your salary and how long you wish to make repayments for. Additionally, when your mortgage is approved, you will have the option to make early repayments, however, there could be a charge if this is within any discountable or fixed rate period.
What Types of Mortgages are Available for Professionals?
Mortgages for professionals provide flexibility as a professional is seen as a more trustworthy and reliable individual. With this flexibility, you can choose a mortgage that works for you and our specialist mortgage brokers at Davidson Deem can help you acquire one of these main professional mortgages:
- Repayment Mortgage – This is the most popular and widely accepted mortgage for professionals and is the most similar to a traditional mortgage. A repayment mortgage is where the interest and the capital of the property are both paid back over the course of the mortgage, therefore, if your mortgage is a 30 year term, all the interest and capital will be paid back in monthly payments over the 30 years, leaving you completely mortgage-free when the term has ended.
- Interest Only Mortgage – Interest only mortgages aren’t as commonly offered now but with the new mortgages for professionals, they are seeing a comeback. Over the course of the mortgage, you do not pay any of the capital back, only the interest. However, once the mortgage term has ended, you will need to repay the mortgage in full. This can see low monthly payment rates which could be beneficial to some but in the long-term you pay back more as you are paying interest rates on the full balance for the duration of the mortgage.
- Part Interest and Part Mortgage – This involves paying the interest in monthly repayments over the period of the mortgage in addition to paying some of the capital back. This means that the monthly repayments will be less than a repayment mortgage, but you will still have some of the mortgage balance outstanding at the end of your mortgage term as you’d still have some of the mortgage to pay back.
Interest Rates and Borrowing Amounts with Professional Mortgages
Generally, the amount that you can borrow with mortgages for professional’s ranges from £50,000 to £2 million but can be greater depending on several factors such as:
- Your income
- The value of the property that you’re looking to buy
- Your credit rating
- Whether you have any current debt
You can usually borrow 90% of your property value without any concerns and up to 75% for an interest only mortgage.
As previously mentioned, interest rates will be lower for professional mortgages over the standard mortgage. However, this is influenced by factors such as:
- How much you’re looking to borrow
- The period of time that you wish to pay off your mortgage
- Your loan to value ratio
- Your credit history
- The type of mortgage that you are receiving
- How much debt you already have
- The current standard interest rate for a mortgage from the Bank of England
Getting a Professional Mortgage Through Davidson Deem
Mortgages for professionals can be confusing but with the right help, they can be a great option for any professional looking to buy a home. Here at Davidson Deem, we are specialists that can help you understand everything there is to know about mortgages for professionals and help you get the best mortgage rate with your criteria. For any further questions or to hire your specialist mortgage broker, call Davidson Deem on 01202 884 111.