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Guide to Professional Mortgages

    CPD
    Approx.40min
    Guide to Professional Mortgages

    Introduction

    Despite the fact these individuals were fresh out of university, with the ink barely dry on their qualification certificates, up until the credit crunch lenders were happy to hand out ‘professional mortgages’ based on what they would be earning in 10 years time.

    No stinky rented bedsit for those who managed to qualify as a barrister or a doctor. For these individuals, up until the credit crunch, their qualifications meant it was straight into a luxurious home.

    Today, professional mortgages are no longer the fairy godmother they were just a decade ago.

    A professional mortgage is still one where the lender takes into consideration an individual’s particular profession when assessing their application.

    Professional mortgages provide beneficial criteria such as enhanced loan-to-value or affordability as a result of the borrower’s occupation.

    These loans are still based on the assumption that many qualified professionals, for example, can expect a substantial and predictable increase in earnings once they have passed their qualifications, and some lenders will be able to consider this as part of their affordability assessment.

    And here is the crux: today’s professional mortgages are subject to the FCA’s Mortgage Market Review’s affordability criteria in the same way that mainstream home loans are.

    This guide will explain who should consider a professional mortgage; how to obtain the most suitable home loan for this type of client and the regulatory requirements for recommending such a deal.

    Supporting material was provided by: Alex Hammond, head of marketing communications at Kensington; David Hollingworth, head of communications of London & Country; Andrew Montlake, founding director responsible for brand, marketing and communications at Coreco Group; and Christine Newell, partner manager of Paradigm Mortgage Services.

    emma.hughes@ft.com

    In this guide

    CPD
    Approx.40min

    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. How long will lenders will expect the borrower to be employed generally for, according to Ms Newell?

    2. Will a GP’s occupation secure them a better rate these days, according to Mr Montlake?

    3. Which lender will accept brokers with CeMap, according to Ms Newell?

    4. What type of lender does Mr Hollingworth say most professional clients will use?

    5. What does Ms Newell say a lender could do if your client is a trainee for a profession?

    6. What lender does Ms Newell say “can offer a more tailored approach to professional clients but don’t advertise or specifically target this market?”

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