Locum Pharmacist Mortgage

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Mortgages For Professionals with complex incomes through the main high street lenders

High street lenders typically provide more appealing rates, making them the preferred choice for many professionals seeking mortgage solutions. However, navigating the complexities of professional incomes can present challenges in securing loans from these lenders.

Professionals often assume they must seek alternative lenders due to the intricacies of their income streams. Yet, armed with a deep understanding of various payment structures, we confidently facilitate successful mortgage applications with high street lenders.

In fact, a substantial 93.4% of our mortgage applications are seamlessly processed through reputable high street lenders, showcasing our expertise in navigating complex income scenarios.

Locum Pharmacist Mortgage (Part 1)

Peter Stokes explains how the mortgage process works if you are a locum pharmacist.

Can I get a mortgage as a locum pharmacist? How does it work?

There should be no issues at all. Locum pharmacists tend to be self-employed, unlike other medical occupations. The self-employed rules often kick in, but as long as you meet that criteria, it shouldn’t be a problem.

What eligibility criteria do I need to meet as a locum pharmacist to qualify for a mortgage?

You’ve got all the normal criteria, such as a certain amount of deposit. They’ll assess affordability and check your credit report, all that usual stuff.

The key here for a locum pharmacist is that self-employed income. There are one or two lenders that will work off of your first full year’s set of accounts, either company accounts or sole trader accounts.

More generally, lenders work from two years’ figures. If those figures are increasing year on year, they will average them. If they are decreasing, they will use the most recent year.

Can a locum pharmacist get a mortgage without a substantial deposit?

Yes, there’s no reason why not. As always, as the deposit size decreases, the lender’s risk goes up, which means they can be a little bit more picky. They may let their computers make that decision, based on their risk algorithms and credit scoring.

It’s fair to say you have to score more points in that system if you have a 5% deposit than with a 25% deposit. It gets tougher to get a mortgage with a smaller deposit, but it shouldn’t make any difference as a locum pharmacist. You’re not excluded from low deposit mortgages.

How does the income of a locum pharmacist affect the amount they can borrow for a mortgage?

As I mentioned, they usually take an average income across the last two years. Some lenders are still capping the maximum mortgage for self-employed applicants. This is still a hangover from COVID really, which is a little strange, but many are lifting that now.

The income they drop into the affordability calculator is used in the same way as an employed income.

There are a few caveats. One lender does some extremely good income multipliers for First Time Buyers, for example, and you have to be employed for that product. But generally speaking, it’s the same criteria as for someone who’s employed.

What factors do lenders consider when assessing mortgage affordability for a locum pharmacist?

Most lenders look at a two-year average to calculate your income. Some lenders will seek accountants’ references and may require some projected figures. Not in great detail, just to see that the trend is continuing and it’s not going to drop off a cliff.

The other side of affordability is around your personal outgoings. Obviously, any business expenditure should be going through your accounts. They’re not going to double count that in affordability, because your income already reflects that.

They will, however, look at the term of the mortgage – how many years you’ll pay it off over. Then they look at your credit commitments: any credit cards not cleared in full, car PCPs, hire purchase, bank loans, childcare and school fee costs.

For the rest of your day-to-day expenditure they tend to rely on data from the Office for National Statistics, based on the size of your household.

So you could have a large income, but if you have a large expenditure, that will reduce what you can borrow.

What documentation is usually required from locum pharmacists when applying for a mortgage?

Generally, lenders will look at your tax calculations, formerly known as SA302s, and your tax year overviews. Some may look at the accounts if you have a limited company, or ask for an accountant’s reference. It’s all showing the same information in a different format.

If you’re predominantly working at one pharmacy, they might ask for contractual documents, but that’s pretty rare. Your proof of income normally comes from HMRC documentation or your accountant.

Can locum pharmacists with irregular income patterns get approved for a mortgage?

You could argue it’s slightly easier, because your proof is a summary of your total income over the year. It doesn’t matter if it’s irregular within that year – they look at a total. Meanwhile, if you were employed and you earn £2,000 one month and £1,000 the next month, lenders might get jittery about that. But you can’t tell that from a SA302 or set of accounts.

If we’re talking about irregularities from one year to the next, they may average those years or just use the most recent year. Week to week or month to month, it all comes out in the wash as it’s your annual summary of income that is presented.

Do I have access to the same government or mortgage schemes as a locum pharmacist?

Yes – although Lifetime ISAs and other government schemes have caps on how far you can go. If you’re looking for a mortgage of £1 million, there aren’t going to be any government schemes out there to help you.

But if you’re within the caps, there are some schemes with lower deposits etc. They are still available to you. The fact that you’re self-employed as a locum pharmacist should make no difference whatsoever.

Do locum pharmacists pay tax? Does IR35 apply to a locum pharmacist?

Everybody has to pay tax. How much you pay and in what format depends on how you work. Employed people pay PAYE tax. Sole traders and partnerships pay the same tax, but via their tax returns.

Limited companies pay corporation tax, and then the money directors take out of the business may incur additional tax. You’re always going to pay tax one way or another.

The IR35 is an interesting one and I’m no tax advisor or accountant and not a specialist on this. But IR35 was brought in mainly for people predominantly working in one place, but on a self-employed basis. It might mean that for totally legal reasons, they end up paying less tax than somebody who was actually employed there.

IR35 was brought in to stop that happening. As far as I’m aware, IR35 applies if you’re working for the NHS. So if you’re a pharmacist working at an NHS pharmacy, IR35 is going to kick in. You potentially can’t be self-employed. But there are ways around IR35, so you definitely need to check that out.

I understand there’s been a slight change in the law, and the responsibility of determining whether IR35 applies now lies with the employer and not the employee. So you’ll be guided by whomever you’re working for, but again, please take advice on that.

What else do we need to know about mortgages for locum pharmacists?

For any self-employed profession, getting a mortgage becomes a little bit more complicated. A good mortgage broker is going to help a locum pharmacist get a mortgage that perhaps they wouldn’t find by walking into lenders on the high street.

The expertise in knowing these professions and how to present a case can be invaluable. It could simply make the difference between getting a mortgage and not. So, please use a quality broker if you’re in that situation.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.

For specialist tax advice, please refer to an accountant or tax specialist.

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Locum Pharmacist Mortgage (Part 2)

Peter Stokes continues the conversation on mortgages for locum pharmacists.

Can I get a mortgage as a student pharmacist and how does this work?

Yes, you can. For student pharmacists, obviously the income is much lower and will affect the size of mortgage you can get. Although you have that potential for greater earnings later on in life, unfortunately lenders won’t take that into account until you’re actually earning.

You would at least need a contract showing that you’re going to be starting work within a short time.

But if there’s still an income, and that’s high enough to allow you to meet your day-to-day living expenditure and get a mortgage, you can go ahead. It may just not be a very big mortgage at this stage.

Can I get a mortgage if I’m a self-employed pharmacist? What’s the difference between self-employed and locum in mortgage terms?

A locum could in theory be employed or self-employed. If you’re employed, you might be working regularly at one pharmacy on a payroll basis. It might be a zero hours contract or a day rate contract – in which case it’s slightly easier to use that income. You don’t need quite as long a track record and just six to 12 months would be acceptable.

But if you’re a locum that’s self-employed, there’s no difference between a self-employed pharmacist and a self-employed locum pharmacist.

You will need two years’ worth of accounts – although one or two lenders can work off of the first year. They will treat that like other self-employed professions and look at your profit.

Self-employed people are generally either a sole trader, where we look at your net profit, or a limited company director, where salary and dividends are the norm. However, we might get a lender to take salary and profits instead.

How does it work with a Buy to Let mortgage as a locum pharmacist?

Generally, Buy to Lets are easier to obtain if you meet the other criteria – which typically include needing to be a homeowner and having at least a 25% deposit.

But Buy to Lets are predominantly underwritten against the rental income that the property generates. The fact that you’re self-employed as a locum doesn’t have much impact.

Many lenders require you to have an earned income elsewhere, and some set a minimum – typically £25,000. As long as that can be evidenced, the rest of the underwriting will focus on the rental income.

So it’s not more difficult than for any other profession, whether you’re employed or self-employed, to get a Buy to Let mortgage.

How does the process of remortgaging work as a locum pharmacist?

In terms of the initial underwriting, it’s the same as a purchase or any other mortgage. A remortgage is moving from one lender to another, and that new lender will assess the credit risk.

Generally, remortgages are for the same amount of money, and you’ll have a track record of paying a mortgage of that size. That gives the new lender some comfort. By contrast, for a First Time Buyer borrowing that amount of money for the first time, there’s more uncertainty.

If you’re looking at the same amount for a remortgage, there’s always the ability to renew with your current lender, which most brokers can do. That lender has already lent you the money, so there is no risk to assess – it’s simply taking a new rate.

If you want to borrow further funds, you’re getting down to that underwrite again, which will be based on one or preferably two years’ accounts. But it’s slightly easier to get a remortgage than a purchase, purely because of that track record.

Can I get a joint mortgage if I’m a locum pharmacist?

Certainly. With joint mortgages, both parties have to meet the lending criteria. While a joint mortgage is often between two partners, it could also be between, for example, a father and son.

That father will be that much older, and that affects criteria. If it’s two partners of a similar age, having two people to call upon gives the lender more comfort.

A joint mortgage also brings a second income into this equation, which is helpful. It may be a standard employed income, which gives greater assurance to the underwriter. They might look primarily at how the employed income supports the mortgage, and then how much more the self-employed locum needs to support.

A joint borrower nearly always helps an application – it’s one more person to call upon with potentially more income. If both of you happen to be locum pharmacists, you would both face the criteria issues we’ve already discussed.

What if I have bad credit? Can I still get a mortgage as a locum pharmacist?

Bad credit can be detected by a lender’s computers during the Decision in Principle process. The computer will analyse your credit report and will determine whether you are a good risk.

Then, the income will go in – that’s what a human underwrites. So one doesn’t necessarily affect the other. If you pass point A, you move on to point B. But if Point A was a close pass and point B is a close pass, an underwriter might put the two together and feel less comfortable.

They might be happy with either a couple of missed payments or just one year’s income records, but putting the two together could become a problem. But generally, these are two separate criteria areas that don’t normally get linked to each other.

What credit score do I need as a locum pharmacist?

This is one of my pet peeves, because credit scores are essentially a marketing tool for the credit reference agencies.

The scores are a reflection of the quality of your credit report. If the score ranges up to 999 and yours is in the 900s, you’re a good credit risk. If you’ve got something in the 400s, you’ve got some problems.

But customers can get hung up on their credit score going up a few points this month, or down the month before. Don’t worry. It’s mainly a marketing tool – to make you take credit through companies that advertise with the credit agency.

Mortgage lenders don’t make decisions based on your three digit score. They delve deep into your credit report to see how you operate in great detail. Is your credit card limit going up? Are you taking cash advances? Do you pay on time? How does your current account look, and are you up to date with your utility bills?

They’re about to lend you several hundred thousand pounds, so they make their mind up from the details in the credit report, not that credit score – although there is some truth to that figure.

If it’s low, there are some issues to address. If it’s a high number, it’s unusual for you to be declined a mortgage. Do keep an eye on that report, because I’ve seen cases where a water company has registered late payments after someone has left an address.

If there’s something bad, the credit agency tends to highlight it in red or amber. Anything good is green. Another thing that’s good to check your report for is stolen identity. If you suddenly see a loan with a bank you weren’t aware of, it’s time to act.

How do I apply for a mortgage as a locum pharmacist?

Hopefully you’ll be using a broker, who will put the application in. They’ll submit supporting information, including your proof of income.

The vast majority of locum pharmacists are self-employed, so it’s helpful to know that most lenders will not accept proof of income if the most recent year is more than six months old.

For example, if you’re using your tax calculation (your SA302) and you apply in November 2025, you need to have your tax calculation done up to the 5 April 2025. If you’re relying on the 5 April 2024 as your most recent year, that’s now over 18 months old.

A lender will insist upon seeing your tax calculation or your SA302 for the most recent year – even though HMRC won’t insist on you submitting that until 31 January 2026. You’ll have to do it, because your most recent set of figures is too far out of date.

This is always the issue for the self-employed. You get one set of figures every 12 months, unlike somebody who’s employed getting a payslip every month.

So my biggest tip is to get your accounts in as soon as possible after your trading year end, and get your tax return done as soon as possible. That can also help you – if that income is going up year on year, we can use it to borrow a larger amount of money.

How else can a mortgage broker help? Anything you’d like to add?

If you’re a locum pharmacist, you’ve been doing this for 20 years with all your accounts and have a stable income, a mortgage broker can still help you get the right deal. We’ll work everything out for you.

If you’re not in that situation, you don’t have that long an income or you need extra borrowing, that’s where a mortgage broker really helps. We can find the right lender with the right product for you.

You could visit all the high street banks and you’d get a huge variety of answers – anywhere from no mortgage at all to a surprisingly high amount. But a broker will know straight away where to go.