Challenges and solutions of securing a barrister mortgage
Variable income
One of the major hurdle’s barristers are faced with is their irregular income patterns. Unlike many salaried professionals, barristers’ earnings often fluctuate depending on the cases they take on and their success in court. It can be particularly challenging for those barristers recently progressing from their pupillage. This unpredictability can make it challenging to demonstrate stable and reliable income to mortgage lenders, who typically favour borrowers with a consistent earnings profile. Consequently, it can be challenging for barristers to meet the stringent income verification requirements set by lenders.
Job security
While barristers are highly skilled professionals, their job security isn’t guaranteed. Unlike employees in more traditional professions, barristers largely operate as self-employed individuals, dependent on securing cases and retaining clients. This lack of (or perceived lack of) long-term job stability can make lenders hesitant, as they often seek borrowers with reliable and steady employment.
Pupillage debt
Completing legal education and training, including the rigorous Bar pupillage, often comes with substantial financial burdens. According to a study by the Bar Council, over half of graduates applying for jobs through the pupillage gateway will have debt of £20,000, and 37% will owe more than £40,000. Of these,12.4% expect to have debt worth over £60,000. While successful barristers can become high earners relatively soon into their careers, the accumulation of debt can negatively impact credit rating and impact their ability to secure a favourable mortgage. Lenders may view high levels of debt unfavourably, unless they have an intrinsic understanding of the industry and earnings profile, reducing the likelihood of mortgage approval or affecting the interest rates and loan amount offered.
Lack of accounts
Typically, lenders rely on personal tax returns to examine a self-employed individual’s financial position. However, aged debt can affect taxable income attributed to barristers, consequently impacting the maximum loan available. Additionally, tax returns will not reflect the current income position, especially in the early years of a barrister’s career where earnings are increasing exponentially. Not all lenders accommodate a bespoke underwriting approach to consider the increasing income, leading to delays and application declines or reduced loan amounts being offered.
Solution 1: Use a specialist mortgage broker like Jordan Lynch
Seeking guidance from a specialist mortgage broker like Jordan Lynch Private Finance can greatly increase the chances of barrister mortgage success. It’s key to use a broker that understands the intricacies of the barrister profession, particularly the exponential increase in earnings that is feasible following pupillage. Having expert knowledge of the barrister profession, as well as an articulate team of advisers that can present an application in the most appropriate way, means we are a go to broker for many barristers.
Solution 2: Build a solid financial history
By demonstrating consistent income, maintaining good credit scores, and improving debt-to-income ratios, barristers can strengthen their chances of a successful mortgage application. This involves meticulous financial planning and budgeting to showcase a strong financial position to potential lenders.
Solution 3: Have a larger deposit
For barristers buying for the first time offering a larger deposit if financially feasible, of say 15% instead of the more normal 10%, reduces the perceived credit risk to the lender and makes the application more likely to be approved.
The challenges barristers face in securing mortgages are complex and multi-faceted. However, by understanding these obstacles, actively managing their financial affairs, seeking specialist advice, and linking up with alternative lenders, barristers can greatly enhance their chances of acquiring mortgage financing. A more holistic assessment of barristers’ financial situations by lenders is crucial for recognising the unique demands and nuances of the profession, ultimately ensuring they have fair access to the housing market.
Let us help
At Jordan Lynch, we’ve built a strong reputation of working with barristers to help them secure the right mortgage product for their needs. Our advisors will:
- Take time to fully understand your needs and circumstances, actual and potential income.
- Engage with your clerk and accountant to compile all the necessary information to be able to present an accurate picture of your circumstances to the lender.
- Access a wide pool of lenders, approaching the ones known to have granted mortgage facilities to barristers with similar earnings profile like you before.
- Present your application along with earnings evidence and supporting documentation to the lender.
- Once the application is submitted, we will liaise with all professional parties and ensure you’re kept up to date with information and updates until it is formally approved.
- Upon approval, we will work with your legal conveyancer to ensure that the mortgage completes on your preferred date.
Call us today on 0161 486 9316 or email sales@jordanlynch.com.
NOTE: YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH REPAYMENTS ON YOUR MORTGAGE