The Client
We recently helped a client buy their first home shortly after they became a partner within a GP practice.
The Scenario
When you become a partner in a GP practice, you are typically treated as self-employed. A partner takes a share in the profits, and losses, of the practice, rather than being employed on a contract with a basic salary the way a salaried GP would be.
This can create a problem when applying for a mortgage, since lenders typically want at least two years of history in a self-employed role before they will lend. Anything less is generally seen as risky, because self-employed income tends to fluctuate more than salaried income, and lenders want evidence of a sustainable track record before committing. On the face of it, our client would not have been able to get a mortgage having only just joined the practice, without the standard two years of accounts most lenders ask for.
The Solution
This was not the case for our client. As a specialist self-employed mortgage broker, we were able to source a market-leading deal with a well-known high street lender.
Instead of the usual two years of accounts, the lender accepted a letter from either the head partner or the practice accountant, detailing the projected drawings the client was expected to receive for the year, backed up by the practice’s detailed accounts.
The Outcome
We secured an income multiple of 5.5 times income and a loan to value of up to 90% – an excellent outcome that left the client delighted with the result.
Frequently Asked Questions
Can I get a mortgage as a new GP practice partner without two years of accounts?
Yes, some lenders will accept alternative evidence such as a letter confirming your projected drawings.
This is usually backed up by the practice’s own accounts, and specialist lenders are more flexible on this than most high street policies suggest.
How do lenders assess income for newly self-employed professionals?
Most lenders want at least two years of accounts, but exceptions exist for certain professions and structures.
Partnerships, in particular, can sometimes be assessed on projected income backed by third-party confirmation, rather than a full trading history.
What income multiple can self-employed applicants typically borrow?
Most lenders offer four to four-and-a-half times income, though specialist cases can go higher.
With the right lender and a well-evidenced application, income multiples of 5.5 times or more are achievable in the right circumstances.
Do I need two years of self-employed accounts to get a mortgage?
Not always – it depends on your profession and how your income can be evidenced.
Some lenders will consider less than two years of trading history where projected income can be confirmed by a credible third party, such as a practice or business accountant.
If you have any questions relating to a self-employed mortgage, contact us today to speak directly with one of our Mortgage Advisors.
UK Mortgage Broker is a whole-of-market broker directly authorised and regulated by the Financial Conduct Authority. Your home may be repossessed if you do not keep up repayments on your mortgage.
Call: +44 1628 969 500
Email: info@uk-mortgagebroker.co.uk
Related Pages
- Self-Employed Mortgage – how lenders assess self-employed income for mortgage applications
- How Lenders Actually Check Your Income – what counts and what does not when a lender assesses affordability
- First-Time Buyer Mortgages – deposit requirements, affordability and how to get approved
- How Much Can I Borrow on a UK Mortgage? – income multiples and affordability calculations explained
- Contractor Mortgages – specialist mortgage advice for contractors assessed on day rate rather than salary