Barristers can often find getting a mortgage tricky. Self-employed, variable earnings, cash-flows restricted by lengthy cases, cost of chambers and travel expenses, not to mention being unable to find the time to research the market.
Your first step is to find a broker who understands a barrister’s finances and the professional environment in which they work in. Presenting your earnings to a lender is key, and you can do that in a variety of manners. For example, whether it be an average of 5 years’ profits, 3 years’ profits, last year’s profits, accountant’s reference or accountant’s forthcoming year’s predictions – all can be used with various different lenders. The key is to match up your specific situation with a specific lender.
There are many specialised lenders and private banks that cater for barristers and understand the world in which they live.
Cash flow can often be a problem for barristers and quite often credit card debt can be run-up to accommodate this. So when looking to remortgage, it is important to use a lender that is potentially able to set up an offset mortgage and consolidate the debt. When the fees that are owed are paid and money is available, the mortgage can be paid down at no extra cost.
Interest-only mortgages may also be useful for a barrister, keeping monthly expenditure low when required and paying down the mortgage when able to. Many high street lenders won’t offer interest-only in the current climate, so knowing which lenders do, and in which circumstances, is important.
Private banks will often be able to offer excellent terms to barristers as many may well sit within the high net worth (£300k income / £3m assets) space. This will enable some lenders to achieve levels of borrowing or product terms they wouldn’t normally be able to be achieve. In some cases, in return for switching your day to day banking and building a relationship, they will return the favour with exclusive and bespoke mortgage terms.
As with all mortgages, the most important detail is speaking to a broker who listens and understands your financial needs. If the broker is fully independent and understands the criteria of each lender, they can match up your needs with the correct (and often cheapest) rate for your circumstances.