Chelsea Gordon, Mortgage Adviser from Yellow Brick Mortgages joins the Mortgage and Protection Podcast to discuss mortgages for professionals.
What exactly is a professional mortgage?
As the name suggests, it’s just a mortgage designed for professional people. It works in the same way as a normal mortgage, the main difference is that it’s for qualified professionals, including vets, doctors and solicitors. There are some really good lenders that actually offer professional mortgages to high earners, whether they’re professional or not, as well.
The biggest difference between this and other mortgages really is the interest rate, which will sometimes be lower interest rates because you’re a professional. Sometimes lenders will also offer a higher Loan to Value. A Loan to Value is basically the amount you’re borrowing against the value of the house.
The main difference between a professional mortgage and a standard mortgage, however, is what’s called an income multiple. Generally at the moment in the UK, you can borrow around four and a half times your income, but with a professional mortgage that can be increased to five and a half times your income. Essentially it means that you may be able to borrow a significant amount more for your mortgage because of the job that you do.
Can I get a mortgage five times my salary?
Some lenders actually offer up to five and a half times your income. The really good thing about this product, is that if only one of the two people applying for a professional mortgage is a professional, then you’ll still qualify for a professional mortgage, meaning that the five and a half times will apply to your joint income.
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How do I get a professional mortgage?
Whether you’re going for a normal mortgage or a professional mortgage, it’s important to speak to a mortgage broker, as we do all the research for you. All mortgage lenders have different criterias in relation to what they consider to be a professional. For example, some lenders now consider commissioned military officers, civil servants or even some high ranking police officers, so you’re always better to go to someone that knows these kinds of things, as it will improve your experience of buying a home.
We have a massive range of lenders that we can go to, and once we know your job and your income, we can do everything else on your behalf. Even if you’re not a fully qualified professional, sometimes you can get those rates on income alone. So, for example, one bank will give professional rates to anyone that earns over £100,000 or any couple that earns more than £150,000 jointly, whether they’re a professional or not.
Do all professions get better mortgages?
It just depends on that profession and there’s also two options. So for example, if you’re a professional, sometimes you’ll get a higher income multiple but that comes with a slightly higher interest rate. What we do as a broker is to look at the standard rates of mortgage deals on the market and the professional rates, and then explain the pros and cons of each.
Some professionals will not be too interested in the interest rate, and are more concerned with buying a larger house, especially if they expect their income to rise, so it really does depend on what’s the most important thing to the client. It’s our job to source you the most cost effective mortgage, whether you’re a professional or not. But we wouldn’t just look at professional mortgages for professionals, because sometimes that’s not the best option overall.
How can a mortgage broker like Yellow Brick Mortgages help?
As brokers, here at Yellow Brick, we would take the information from you. We would do all of the research, complete the applications, the paperwork, and all of the follow up work. So all the client has to do is explain what they want, what they need and what their preferences are, and let us know their income and their job type. We provide clear mortgage advice, we’re not a jargon company, we don’t want to confuse people.
Many clients are worried about qualifying for a mortgage or finding a lender who will consider the fact that they’ve started a new job. You don’t have to worry about this type of issue, you tell us your circumstances and we find a way to make it work on your behalf. The hardest part of the house buying process for the client is choosing the property, everything else should be left to your broker.
House prices are pretty high at the moment and it’s definitely a seller’s market because a lot of things are selling above the asking price. If anybody has got any other questions on professional mortgages or any mortgage related enquiries, go to the ‘about us’ page on our website and the entire team is on there. We all have a little bio, so that you know who you’re dealing with before you even pick up the phone.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.