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Barrister Mortgage
If you’re working as a barrister, you may be working for a legal company on an employed basis on the payroll and if so, this should allow you access to the prime lenders and help you get a high street barrister mortgage. It would of course depend on many other factors such as your deposit and your overall credit score.
If you are working for yourself or are the owner of the company, it may be assessed differently so this could affect your options.
Some lenders that can consider lending to ages 75 or 80 and if you are a barrister, you may be more likely to get these terms than another more manual profession such as a builder.
As the role of a barrister is considered a ‘professional occupation’ there are sometimes special products and terms offered by lenders such as a ‘professional range’ of products. This may mean higher income multiples as they expect you to climb the professional ladder.
If you are a self employed barrister, your income may fluctuate over the years depending on the cases that you take on. Lenders work differently when calculating this.
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What can be the challenges for a barrister looking for a mortgage?
Working as a barrister, you may be employed or self employed (which can sometimes make things more difficult to get a mortgage). If you are employee, lenders will need to understand your basic income and anything on top such as bonuses which some legal firms may pay throughout the year.
For self employed barristers, lenders will need to understand the past performance of your business and how things are looking going forward. Your business accounts, bank accounts and personal accounts are likely to be requested to get an overview of how the business is doing and what it will likely look like in the future.
How many years of accounts do self employed barristers need to get a mortgage?
Most commonly, lenders will ask for two years however there are lenders that can consider applicants with only one year. If you can only show one year of history working as a self employed barrister, they would want to know about your previous experience. It’s likely in this case that you were an employed barrister before and if that’s the situation, the lender may want to see past payslips, P60’s and a copy of your CV.
Some average income, some will use the latest year and some would use net profits of a limited company rather than dividends. A skilled mortgage adviser would assess your numbers first and then pick a lender accordingly.
How much can I borrow as a barrister?
It really depends from lender to lender, and how your income is made up working as a barrister.
For employed barristers, they would use the salary, allowances and bonuses if applicable (different lenders may use a different percentage of the bonuses).
If you’re a sole trader they would use your net profit before tax and a multiple of this, up to a maximum of around five times this profit, perhaps more if using a professional mortgage.
There’s lots more to take into account though and when assessing affordability so your mortgage adviser would confirm this with you when going over the full scenario.
Working as a barrister, would I get a ‘professional mortgage’ and what would this mean?
Some lenders offer what is called a ‘professional mortgage’. These are for certain occupations that they believe to be difficult to qualify for reflecting many years of studying to get the qualification needed to practice. A barrister would usually be included within this list.
The idea is to be able to lend these professionals more than they perhaps would for another occupation, for example, up to seven times income.
This may be that the professional is newly qualified living in an expensive area, could not buy the place needed on standard lending multiples but due to their qualification, they are expecting earnings to increase significantly over the coming years.
The type of occupations that are often included on the list of professionals are barristers, lawyers, doctors and accountants. There are usually more but lenders will have a different idea of what they consider ‘a qualifying professional’ and most lenders not not offer these products.
For the lender to consider you qualified to meet the criteria for one of their products, they may wish to see the qualification and that you’re fully regulated by the Bar Standards Board.
Would I get a buy to let mortgage working as a barrister and would I qualify for different terms?
Absolutely, barristers will qualify for a buy to let mortgage assuming they meet the lenders other criteria, for example credit, deposit and residency.
If you are a barrister, it may mean your income is significantly higher than the average persons. If this is the case, it may mean you qualify for a higher buy to let mortgage with certain lenders as some will use ‘top slicing’ to top up any rental stress test shortfalls with personal income. The higher your income is, the more likely that this will be the case.
To find out more about what buy to let mortgages you would be likely to qualify for as a barrister, best to talk to an experienced mortgage adviser. I NEED ADVICE can arrange a free consultation if you complete the contact form.
Bear in mind, if you plan to buy a property to let, you will be taxed on the rental income. Speak to a tax specialist about this. More information here about declaring rental income from HMRC.
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I’m a self employed barrister with my own firm and want to buy a commercial building to trade from, would I get a commercial mortgage?
If you are working as a barrister and running your own legal company and now is the time that you want to buy commercial premises to trade from, you could absolutely look to take a commercial mortgage to finance this.
Lenders will need to understand your legal business, the set up, past financials and what things look like going forward. They need to be confident that you will be able to pay the commercial mortgage so will look at both the business and your personal situation.
You would usually need a deposit of around 30% as a minimum to buy a commercial property but it will depend on the overall scenario. If this is something that you are thinking of doing, you should talk to a commercial mortgage broker.
I NEED ADVICE can put you in touch with a qualified professional to give you advice in this area if you complete the contact form.
If you are talking with a commercial mortgage broker, perhaps find out if they are members of the National Association of Commercial Finance Brokers.
Would I get a mortgage as a barrister with bad credit?
There are many different factors that determine whether or not your credit score qualifies as “bad.” Lenders use credit reference agencies such as Experian or Equifax, they score you based on your financial past and give you a rating based on your history. “Bad” could constitute a high debt to income ratio, missed / late payments, CCJs or defaults.
It is definitely possible and as there are lenders that like lending to people in professional roles, they may be more lenient on past adverse credit due to your occupation and income if they were confident that anything adverse was firmly in the past.
If you believe you may have bad credit, perhaps get a copy of your credit file from a website such as Check My File who offer a free trial to their subscription service.
What documentation would I need to provide to a lender to get a mortgage as a barrister?
For an employed barrister, it would usually be payslips, P60’s and bank statements. For a self employed barrister, it would likely be business accounts, tax documents and bank statements for both the business and personal use. Each lender may have a different requirement and your mortgage adviser would confirm the required documents.
Conclusion
Working as a barrister is considered to be a very professional position and as a result, you may be offered additional products and terms with some lenders to reflect the expected climb up the corporate ladder in terms of promotions and income.
It may be that you can borrow more money as a result of your role. Like any borrower, you should always take professional advice before going ahead with a mortgage.
If you would like I NEED ADVICE to arrange for a qualified mortgage adviser to tell you your options, complete the contact box on this page.
They are experienced, which can boost your chances of being approved.
