Generally, professional mortgages are available for individuals who have a recognised qualification in areas such as legal, accountancy or medicine.
Today some professionals may earn variable income that is more difficult to assess as part of a one-size-fits-all affordability assessment. A good example of this would be solicitors who are partners in a law firm, or even doctors who work for both the NHS and in private practice.
Alex Hammond, head of marketing communications at Kensington, says different lenders will have their own list of professions that they will consider for a professional mortgage. In general, Mr Hammond says what a lender will say is that borrowers need to be registered to a profession.
Christine Newell, partner manager of Paradigm Mortgage Services, says this means they need to be registered with the relevant professional bodies for their industry such as the Institute of Chartered Accountants or The Bar Council for Barristers or the General Medical Council for Doctors.
Some lenders can also accept trainee solicitors, accountants, lawyers, and the like. Ms Newell says on top of this, the lender may add in a guarantor such as a parent to the underwriting of such loans for trainees as they know that they are in a progressive salaried job.
She says: “Scottish Widows have recently added teachers to their list of professions and this now gives more choice for these types of clients.
“Saffron Building Society offers a tailored approach to similar professional people but will also accept brokers with CeMap or equivalent examinations and IFAs qualified to level four on their professional range.”
Obviously a candidate for a professional mortgage is also a candidate for standard products and schemes that are available to all clients.
But Kensington’s Mr Hammond warns a high street lender may not take full consideration of their profession when it comes to maximum loan-to-value (LTV) or affordability.
Alternatively Mr Hammond says there are those lenders that offer specific professional mortgage ranges, or an adviser could consider a specialist lender that uses manual underwriting to fully assess each individual’s circumstances.
Mr Hammond says: “The availability of good deals depends very much on the individual’s circumstances.
“Specialist lenders, like Kensington, will use experienced underwriters who are able to make a personal assessment on an individual’s circumstances.”