Q1: Can I use my accounts before my tax returns are finalised?
Yes. Some lenders rely on finalised tax calculations (SA302s), but others will accept finalised sole trader accounts from your accountant. This flexibility allows barristers to present a more accurate income picture and maximise borrowing potential.
Q2: Can I secure a mortgage based on projected income?
Yes, although it’s not standard across all lenders. Some will consider projected income if you have a proven track record of growth and supporting evidence from chambers.
Q3: Can lenders assess my accounts instead of my SA302?
Yes. Some lenders will underwrite based on accounts rather than relying solely on tax returns, which can maximise borrowing potential, particularly if your accounts show a higher income.
Q4: Do I need two years’ accounts to secure a mortgage?
Not necessarily. While many lenders prefer two years of accounts, some specialist lenders offer mortgages with just one year’s accounts, benefitting barristers in the early stages of their careers.
Q5: How much can I borrow as a barrister?
The amount varies between lenders, as each has its own affordability model and assessment method. Your income, outgoings, and financial commitments are key factors. Working with a mortgage adviser familiar with barristers’ needs can help secure better terms.
Q6: Can I use my most recent year’s accounts?
Yes. Some lenders may base their decision solely on your latest year’s accounts, especially if they show significant growth. Bespoke lenders often take a holistic view of your finances.
Q7: What documents do I need to provide for a mortgage?
Typically, you’ll need:
- Last 2 years’ accounts
- Tax calculations (SA302s) and overviews
- Last 3 months’ bank statements
- Projection letter from your senior clerk
- Aged debt report
- Payment summary
- Work done report
Q8: What happens if my earnings reduce?
High street lenders often use stringent assessments, but bespoke lenders understand fluctuations in barristers’ income. Providing a comprehensive income trajectory can mitigate credit risk concerns.
Q9: Is obtaining a mortgage harder for self-employed individuals?
Not necessarily. The process differs due to income fluctuations, but lenders familiar with barristers’ circumstances are often more flexible in their policies.
Q10: How many years of trading history do I need?
Technically, none. Some lenders offer mortgages to barristers with little or no trading history, even during pupillage.
Q11: Can my mortgage be on an interest-only basis?
Yes, subject to meeting certain criteria. Some lenders require a minimum income or property equity. Interest-only mortgages can be useful for managing fluctuating income.
Q12: Will maternity or paternity leave affect my mortgage application?
Lenders typically assess income based on your latest and previous tax calculations or accounts. They may consider childcare costs when calculating affordability. Holistic lenders can account for income reductions if you plan to return to work.
Q13: What are the benefits of an offset mortgage?
Offset mortgages reduce interest by offsetting savings against your mortgage balance, which is especially useful for barristers using tax funds to manage interest costs.
Q14: Can pupil barristers get a mortgage?
Yes. Some lenders offer mortgages based on pupillage awards, recognising future earning potential.
Q15: Can part-time judge/recorder work be used in income assessments?
Yes. Lenders may include sporadic judicial work in their assessments if there’s evidence of income or a contract.
How Does Henry Dannell Support Barristers?
At Henry Dannell, we work closely with barristers at all stages of your career to ensure that lenders fully understand your unique income structure. We have exclusive pilot schemes with lenders specialising in professional mortgages who understand the nuances of barristers’ earnings, such as fluctuating income and aged debt. These tailored solutions can improve your mortgage options and help secure better terms. Our advisers are dedicated to providing bespoke guidance and giving you access to lenders who understand your profession’s unique financial profile.
Have more questions or want to explore your mortgage options? Please do not hesitate to get in touch; our team of specialist advisers would be more than happy to assist.
Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
