Barrister mortgages
Case study - First time buyer requiring a high income multiple mortgage
We recently acted for a barrister who was in her second trading year, wanting to borrow £350,000. Her net income after chamber's fees and associated expenditure in the first year was £50,000, which only justified a mortgage of £250,000 with mainstream lenders.
The clerk of the chambers provided a statement confirming invoices raised for the first nine months of the second trading year that indicated full year net earnings were likely to be £80,000. We presented this tot he bespoke underwriting division of a major bank who provided the £350,000 at a prime interest rate, avoiding the need to approach a specialist lender that charges a premium rate.
Pupillage mortgages
Recently, we've been able to obtain mortgage finance with affordability assessed on pupillage income alone. We have good relationships with a number of lenders who understand the natural career progression of a barrister, allowing them to consider scenarios which would be outside policy for most mainstream lenders.
Case study - Raising capital to settle a tax liability
We acted for a barrister who'd had a large reduction in earnings due to a short illness, creating cash flow problems. He had approached his existing lender to borrow £100,000 to settle a tax bill but they declined it due to the reduced earnings and the purpose of the additional funds. The existing mortgage was £450,000 and to remortgage to another lender would have meant paying a £22,500 early repayment charge as they still had 18 months remaining on a five-year fixed rate.
Aside from these penalties, mainstream lenders will not provide additional funds to settle tax bills so the only remortgage option available would've been to a specialist lender that charges premium rates. Our solution was to arrange a second charge mortgage with a specialist lender, who were satisfied that the reduction in earnings was temporary and were able to provide the necessary £100,000 at a competitive rate of interest. This meant that they avoided paying the penalty charge and continued to pay interest at 1.89% on the £450,000 that was on a five-year fixed rate. Once the penalties expired on the fixed rate, we were able to remortgage and consolidate both the existing mortgage and secured loan on to one mortgage at a market-leading rate.
Case study - 67-year old barrister wanting to extend their term
Many barristers work into their 70s and we recently acted for one 67-year-old who wanted to extend their interest-only mortgage of £400k until they were 75 when they intended to downsize.
High street lenders wouldn't lend in this scenario as many have a maximum age of 70 at the end of the term, but they were also put off as the annual net income was declining year-on-year as the barrister reduced his caseload.
The property was worth £1.2m so they had £800k of equity, meaning they had a robust repayment vehicle for the interest only borrowing as it's plausible to be able to buy a smaller property in the desired area, with the level of equity generated from the future sale.
We were able to secure the required funding with a building society that offers bespoke terms. They were able to overlook the declining income as the barrister had a large pension fund that was professionally managed, and could act as a supplementary income source should earnings continue to reduce. Despite the specialist nature of the proposal, the mortgage was offered on competitive terms on par with mainstream lenders.
Case study - Purchasing a second home close to work
We often arrange mortgages for barristers who either desire a second home in the city close to their place of work, or a holiday home. Recently, we acted for a KC whose work was split between their hometown of Manchester and London, but had become tired of staying in London hotels. Having viewed properties in the desired area, they agreed to purchase an apartment for £1m. They had £100k cash to cover stamp duty and associated purchase costs, but with no significant deposit readily available, they approached Jordan Lynch for advice on the best way to proceed. They did not want the monthly interest payment to be any more than the £3,500 they had been spending on hotels each month.
Our solution was to raise a £400k deposit by remortgaging their main residence in Manchester which increased that mortgage to £900k, but as the property was worth £1.5m they still qualified for the lowest rates available as the loan-to-value (LTV) was just 60%. We then arranged a mortgage of £600k on the second home in London which again equated to 60% LTV ensuring the very best rates. The two mortgages were provided on standard residential terms by prime lenders at historically low rates which meant that monthly interest payment on the additional 31.0m of borrowing amounted to just £3,000 pcm.
Let us help you
Whether you've just completed your pupillage, have one year's accounts or are an experienced barrister or KC, applying for a mortgage with a UK lender can sometimes be a frustrating process. Here at Jordan Lynch, we've been arranging mortgages for barristers since 2006 and have a dedicated team of expert advisors that provide a premium service to barristers, KC's and high court judges in a time-efficient manner.
Our in-depth knowledge of a barrister's career progression and remuneration structure enables us to select the most suitable lender. We provide a hassle-free services and turn things around quickly for the vast majority of barrister mortgage applications. If you have a more complex lending scenario, we'll take time to understand your situation and map out the best way forward.
Call us today on 0161 486 9316 or email us via barristers@jordanlynch.com.