Mortgages for newly practising dentists
A new associate can have a strong future and very little income history. Some lenders are set up to read that.
- Entry
- No. 003
- Written by
- Gaurav SophatMortgage Agent Level 2
- Published
- 2 min read
A dentist in their first years of practice often looks unusual to a standard mortgage file. There may be a large student loan, a year or less of income, and pay that arrives as a percentage of production rather than a salary.
Many associates are paid as independent contractors, and some incorporate a professional corporation early.1 Either way, the income is self-employed income, which usually brings the history question with it.
What professional programs look at
Several lenders run programs for licensed professionals. They differ in the details, but many start from the same idea: a licensed dentist has a predictable earning path, so the file can lean on the licence and the contract rather than on two years of returns.
For a newly practising dentist, the licence and the associate agreement can carry part of the weight that income history usually carries.
- Proof you are licensed and in good standing with the regulator
- How long you have practised, including residency or earlier associate roles
- How your student debt is counted, which varies between lenders
Programs change, and their terms depend on the lender and your circumstances. They are an option to compare, not an automatic answer. Sometimes a conventional file with a little more history is the stronger path.
A home and a practice are separate questions
Buying into or purchasing a practice is usually financed separately, often through commercial lending. The two decisions affect each other, though. A large practice loan can change what a residential lender will offer, so the order you do them in matters.
- Licence
Proof of registrationFrom the Royal College of Dental Surgeons of Ontario
You - T1 · NOA
Personal returns and assessmentsWhatever years you have, even partial
You - Pay
Recent pay statementsShows what the agreement is paying in practice
Practice - Loans
Student loan statementsBalances and payment terms
You
Whether to incorporate, and how to pay yourself, are questions for your accountant. The practice purchase agreement is for your lawyer. We look at how the whole picture reads to a residential lender and which programs fit.
Gaurav Sophat, Mortgage Agent Level 2 · DLC FC Funding #10671
Explanations are general. What a lender accepts depends on its current requirements, your documents and your circumstances.