Solicitors are respected professionals and generally held in high esteem. As such, they might be expected to secure favourable mortgage deals more easily than most. Unfortunately, for a variety of reasons, that’s not necessarily the case. Depending on the nature of your income, it might be tricky to prove to lenders just how much you are earning, which impacts on your ability to borrow the amount you need. Also, many high-street lenders aren’t really geared up to deal with complex earning structures, and so specialist help is often required.
Challenges and advantages of getting a mortgage as a solicitor
A key element of any mortgage offer is the outcome of the lender’s affordability assessment. This is an assessment of the mortgage applicant’s ability to repay the loan, based on how much they have coming in, versus how much is going out. A solicitor’s income is often variable, and may include overtime, freelance work and/or bonus payments, and high-street lenders might not be prepared to take all of these income sources into account. That can mean that even though a solicitor is a high earner, only a portion of their income counts in the assessment. That impacts on how much they can borrow, meaning that in some cases they might not be able to buy their preferred property. The other side of the coin is that solicitors are qualified professional people with the potential for very high earnings, and that is attractive to a lender.
Mortgages for solicitors
Solicitors have access to the gamut of available mortgages, from repayment and interest-only through fixed rates, variable rates, flexible repayments and even self-build. The type they opt for will depend on their own personal circumstances. For example, if they want to budget carefully, then a fixed-rate mortgage might be best. If they think there might be an interest rate fall in the offing, then they might want to take a variable rate deal – while accepting the rate could also rise. If income itself is inconsistent, then a flexible mortgage – perhaps one that allows payment holidays – might be most suitable. Advice from a specialist broker will help people identify the best mortgage for them.
How do I prove my income?
If you are employed and paid a regular salary, perhaps because you are recently qualified, then copies of your payslips will suffice. Where it gets complicated is if you are self-employed or a partner in a bigger firm. In the case of a self-employed solicitor, lenders will generally want to see a minimum of two years’ accounts, prepared by a chartered accountant.
Anyone who is a partner in a global firm, and who perhaps doesn’t receive all their income in sterling, will face further complications. When they are assessing affordability, most lenders don’t generally take foreign currency income into account.
A highly experienced but newly self-employed solicitor may, ironically, face more issues getting a mortgage than a newly qualified solicitor they employ. It is here where specialist mortgage brokers, with access to lenders with an understanding of the particular circumstances solicitors face, can really make a difference.
How much can I borrow? And how much will it cost?
As we’ve already mentioned, how much a person can borrow is based on the lender’s affordability assessment. Some lenders – particularly smaller, more specialist lending companies – may be more flexible than others in terms of which income sources they will take into account when assessing affordability.
The other element that comes into play when assessing how much someone can borrow is their credit rating. This also affects how much a mortgage will cost. Someone deemed to be higher risk, based on their credit score, will not only be able to borrow less, they will typically have to pay a higher rate of interest. Similarly, someone with an exemplary credit score will be able to borrow more and the loan will cost less.
How Just Mortgage Brokers can help
Here at Just Mortgage Brokers we have an experienced team of independent specialist brokers with access to deals not available on the high street. These well-established lender relationships – backed up by an understanding both of the particular circumstances faced by solicitors, and access to the whole of the UK mortgage market – mean they are well placed to help you get the best available deal. Contact us today for free initial information and advice.