I’m currently an fy2 looking to buy soon. I have an IMT job for next year. Does anybody know roughly what sort of mortgage I can afford? Will they take into account all my earnings or just basic pay? How will different rotations paying different amounts and the short term contracts affect things?
The two high street banks I approached would only accept me as a person on short term contracts i.e. high risk i.e. expensive. They actually wouldn't accept me at all until I started the job. So I used (paid for) a broker who had specific familiarity with doctor's contracts and should have been able to advocate for me. They did get me exactly what I wanted, to be fair. However, also 1) They would only take regular wage, not out of hours 2) I had to have 10% deposit - none of this 5% stuff. Although that might not be so bad now they've scrapped stamp duty on first properties 3) I had to have two years on a contract i.e. they only accepted it because I hadn't started CMT yet. Again, might not be so bad given IMT is now 3 years.
That might sound annoying but there are a couple of caveats to mention:
1) Are you buying alone? If not you can probably afford a very decent first property based on basic alone
2) If you're using the help to buy ISA (as you definitely should be) there is a limit to the property price, which might be below what you could afford if you're not alone, so that's a big financial incentive to not go crazy
3) Its not very financially sensible to go for a property at the top of what you can afford. The interest is too much of a burden, that burden increasing in an exponential way. You also don't know what's going to happen in the future - sickness, children, part time, time out of work, whatever. Purely in terms of finances, the best thing would be to get the cheapest property you can tolerate, pay it off quickly, then all your earnings go into saving for the next one. In reality most people go for somewhere in the middle, of course, but taking on such a heavy burden is not advisable.
I think it did help that the mortgage advisor the bank gave me had some kind of connection - a relative or family friend - who was in the medical field and so they had some awareness of the weird system. Also I had a decent deposit. I'm not sure if either of those things made a difference.
Based purely on my experience alone, I'd say it is worth approaching a bank (?or two) first rather than paying somebody for assistance. However I've also heard people having absolute nightmares trying to get a mortgage. I myself have had previous difficulty just trying to rent(!!) a flat, because of the stupid system and not being able to show contracts.
In the end, I decided to go for a flat that was quite a bit cheaper than the maximum I was offered. I didn't want to commit to high mortgage repayments because I was nervous that I would end up having to move around during my training and didn't want to be stuck paying an expensive mortgage + rent in another city for a while.