How changing job could bag you a bigger mortgage
WANNABE homeowners could find that changing job leads to a bigger mortgage - and not just because it might boost their salary.
That's because some lenders offer what's known as "professional mortgages" to people with certain jobs.
These mortgages can see lenders willing to give you a loan that's five and a half times your salary rather than the usual four to four and a half, which means you can buy a bigger house.
These mortgages can also be good for first-time buyers with smaller deposits as they're often more flexible when it comes to offering loans to those with just a 5 per cent deposit.
Of course switching job isn't easy, especially when it can require studying or training.
But depending on where you study, your course, your age, and whether you've studied before you might qualify for a student loan to cover tuition and living costs. See for more information.
Some professions may even pay you to train on the job, such as certain teaching roles (see for more information), so do your research.
Here's what you need to know about professional mortgages in the meantime.
Which jobs qualify?
According to mortgage expert Ray Boulger, from broker John Charcol, these professions typically include accountants, actuaries, architects, barristers, chartered surveyors, commercial pilots, and dentists.
Medical doctors, optometrists, pharmacists, professionally qualified independent financial advisers (IFAs) to level four, solicitors, teachers, and vets are also covered.
This is because people in these roles are likely to see a rapid rise in income in the years after qualifying.
How do you find the best mortgage deals?
HERE'S how to ensure you get the best deal on your mortgage or remortgage:
Websites such as MoneySuperMarket and Moneyfacts have mortgage sections so you can compare costs. All the banks and building societies will have their offers available on their sites too.
If you're getting confused by all the deals on the market, it might be worth you speaking to a mortgage broker, which will help find the best mortgage for you.
A broker will typically cost between £300 and £400 but could help you save thousands over the course of your mortgage.
You'll also have to decide if you want a fixed-deal where the interest you're charged is the same for the length of the deal or a variable mortgage, where the amount you pay can change depending on the Bank of England Base Rate.
Remember, that you'll have to pass the lender's strict eligibility criteria too, which will include affordability checks, and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month's payslips, passports and bank statement.
And while you might be tempted to get a mortgage without a deposit, they tend to be more expensive than other deals, so you could be better off saving up instead.
You can check out our guide to the best first-time buyer mortgage deals here.
Dilpreet Bhagrath, mortgage expert at online mortgage broker Trussle, said: “Professional mortgages can have associated benefits such as increased affordability depending on the borrower’s occupation.
"As an example, some lenders will consider a medical doctor’s earnings trajectory once they’re qualified as part of the affordability assessment.
"This may provide a route to home ownership for those with limited income but an increased earnings forecast.
"As a result, they may be able to provide a smaller deposit compared to the standard mortgage products available."
But it can even help students training on the job for one of these professions.
Mr Boulger said: "Students – assuming you’re learning on the job - is exactly the kind of person that a professional mortgage will help.
"This is because while you're training you may only be earning £30,000 a year. But in five years you could be earning double.
"And buying a bigger home to begin with could also mean you save on the costs of having to move home again in two years or three years time."
Which providers lend these mortgages?
Mr Boulger says lenders in this space include Clydesdale Bank, Darlington Building Society, Metro Bank, Saffron Building Society, Scottish Widows Bank, and Scottish Building Society.
But he points out that all lenders will have different definitions of professional so it's worth checking just to be on the safe side.
Financial comparison service Moneyfacts adds that borrowers also need to take into consideration the interest rate - and not just the amount they can borrow.
Its financial expert, Rachel Springall said: “It’s so important for prospective borrowers to assess any mortgage deal for the length of the loan and not just the initial years, as interests could rise and they may find it difficult to refinance down the line."
But Mr Boulger says professional mortgage rates tend to be similar to more mainstream mortgages. He said: "Chances are they're not the most competitive rates.
"But if you’re keen to buy a property that requires a bigger mortgage then these professional mortgages might only be 10 or 20 basis points more."
See the box above for some example deals currently available.
Can I tweak my job title?
Sadly tweaking your job title is unlikely to have much of an impact on the mortgage offered, according to both Mr Boulger and Ms Bhagrath.
And of course you should always be honest on mortgage applications.
It's also likely you'll need to show proof of your profession to qualify for a professional mortgage.
If you're struggling to compare deals yourself, you may want to consider using a whole of market mortgage broker - and there are ones that are completely free. See the box above for more information.
More on mortgages
Here's how to apply for a mortgage and boost your chances of getting accepted.
And here's how to improve your chances of getting a mortgage with bad credit and boost your credit rating.
Plus, new mortgage rules should make it easier to get the cheapest home loan deal in future.
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