A Mortgage Guide for Dentists

Buying a home as a dentist can be daunting and a confusing process as there is a lot to consider. The guide is split into relevant sections to help you navigate through the different areas when considering purchasing a new home with a mortgage

Once you’ve saved up an amount to contribute towards the cost of purchasing your home, you will also need to consider additional costs as well. 

A larger deposit will always mean more competitive interest rates. We would always suggest that you plan for buying a house as soon as possible, we often tell new dentists to think about this as soon as their career gets going. Plan to put away a certain percentage of your income so that you can plan how many years it would take to build up a big enough deposit for your new home. 

As a new dentist just getting started in your career you may not be in a position to stump up a big deposit for a house, however, there are ways of getting the house of your dreams with a smaller deposit, for example, there is a 95% mortgage scheme available to buyers from a lot of lenders right now. If you need advice on this please contact us to find out more.

You will also need to save for additional costs such as solicitors, stamp duty, and estate agency fees, if you’re selling a property. Having an idea of the additional costs will help you budget for when you find your dream property. 

As part of the mortgage application process, the lender will need to visit the property your are looking to buy in order to determine the value of the property, this checks that in the eyes of the lender, the property you’re purchasing is worth the agreed purchase price. Some lenders do not charge for the valuation, whereas others charge anything between £150 – £1,500 depending on the value of the property. 

For your own peace of mind, you may want to consider a more in-depth survey on the property, this confirms if there is any works to be done on the property and reconfirms the condition before you purchase the property; otherwise, there could be some hidden costs!
During an appointment with PFM Dental will talk about when’s the best time to instruct an independent surveyor. 

The solicitors will carry out the legal work for the purchase of your property, they will review the draft contracts, order searches, (documents provided by parties such as local authorities or environmental agency, these will highlight things such as flood risk, land stability, leal ownership etc), and raise enquiries (questions sent to the seller’s solicitors that include requests for further information or guarantees/ planning permission for any work that the vendor has carried out).

It is a legal requirement stipulated by the lender that the property must be insured through house insurance, we also recommend that you consider taking out content’s insurance as this protects your valuables within your home. 

In addition to protecting the home, we would also recommend that you consider personal protection to make sure you can always keep the home in the event of ill health. There are different types of personal insurance such as income protection, life insurance and critical illness cover. 

Once you’ve purchased your property you will have ongoing commitments to keep running the property such as your mortgage payment, council tax, water, utility bills, internet etc. During an appointment with PFM Dental we can talk about the costs of running the property to allow you to budget monthly. 

These are often overlooked by many potential buyers as they are generally not as straightforward but may benefit some more than others.

An offset mortgage is available to some lenders who also hold a savings account with their mortgage supplier. You will be able to offset the mortgage balance with your savings and therefore pay a lower interest rate.

A self-employed dentist may want to take advantage of these types of mortgages as you may have savings account for things like taxes and expenditure that can build up to large amounts. Why not use this to lower your mortgage rates?

Last year we saw mortgage interest rates reach record low month after month, experts are predicting interest rates to rise during 2021. As the economy begins to reopen were expecting mortgage interest rates to increase as well, however, this increase will not be an impact that happens overnight. Of course, there is no crystal ball to these predictions. 

What does this mean for mortgage borrowers? For those that are looking to purchase a new property or for those that are wanting to remortgage, still have chance to fixed into a low-interest rate product. At the moment there is many competitive interest rates on the market, with lenders competing against one another, some lenders have even dropped their rates below 1% – for the first time in four years!

However, these super low-interest rates do come with large upfront fees, this means that it’s worth speaking to us, we can then do the calculations to find you the best product that meets your circumstances. 

The mortgage process can seem daunting and long winded; here at PFM; we explain the mortgage process to you in detail; taking through each individual step and also answering any questions that you may have.

During the first appointment, you will discuss your current circumstances and affordability, this will then be reviewed to reveal how much you can borrow, and the costs involved.

After the appointment, research will be carried out on your behalf; this means speaking to numerous different lenders; reviewing their affordability calculations and the product that they have available. This process will find the most suitable lender for you, based on your individual circumstances.

After initial research, the next steps would be to get a Decision in Principle with the lender; this is based on the lender’s credit search and scoring system. Once your decision in principle has been approved; it’s time for you to start looking for that dream home. The majority of estate agents will require to see a copy of the Decision in Principle prior to accepting an offer on a property; therefore, it’s important to have this before viewing any houses.

Once you’ve had an offer accepted on a property; it’s time to submit your full mortgage application to the lender. This is where the underwriters review the details of your mortgage application, assess your income, expenditure, and value the property. The valuation is to determine that the property is worth what you’re paying for it.  

Once the underwriters have reviewed the full mortgage application; this process normally takes a couple of weeks. You’ll receive a formal mortgage offer; this means that the lender has accepted the mortgage application on your behalf, the mortgage offers usually last with the majority of lenders 6 months.

You’ll now be in the hands of the solicitors through to completion; they’ll start the legal process and will be in regular contact with you. The next stage would be exchange of contracts; this means that you’re legally bound to purchase the property.

Once your solicitors have completed all of the legal work and you’ve exchanged contracts; you’ll arrange a suitable completion date; on this day you will officially own the property. From submitting the full mortgage application through to completion; the average transaction usually takes around three months to complete. 

Moving into your first home is an exciting milestone and the start of a brand new chapter in your life.
But that doesn’t mean it’s easy. So how can you make moving in as joyous and stress-free as possible?
Here’s a handy checklist to help you get started…

It’s never too early to speak to us about purchasing a property, whether you’re a new dentist and at the very first steps and thinking about purchasing a property or you’ve fallen in love with your dream property. The first appointment will be focused on your requirements and your circumstances. 

We will then be able to complete a decision in principle on your behalf, the majority of estate agents require these upfront when offering on a property. The decision in principle will confirm how much you can borrow and is your ticket to viewing houses. 

We understand that dentists trade under different business structures, we can help Limited Company directors, self-employed associate dentists and partners find a mortgage. We also specialise in finding mortgages for newly qualified dentists.

Book an appointment today and see how we can help you.