Independent barristers may find it difficult to get on the property ladder, as they often present a challenge to mortgage lenders. Although you’re a highly-qualified professional with great income growth potential, you’re also a self-employed practitioner with a highly variable monthly income and substantial practice costs. As a result, this can be a complex calculation for mortgage lenders to assess what size of mortgage commitment you can reliably obtain. Therefore, many barristers struggle to secure a level of mortgage lending that fairly reflects their actual income and earnings potential. To make this process easier, we will share several steps you can take to give yourself the best possible chance of being accepted for a mortgage.
Improve Your Credit Score
One of the most important factors to get on the property ladder is to ensure you have a good credit score. Firstly, you may want to get a credit card, if you don’t have one already. Ensure you pay off at least the minimum amount every month and close any credit cards you are not currently using. Also, it’s best not to apply for any form of credit in the months leading up to your mortgage application. You can obtain a copy of your credit report from the three main credit reference agencies, including Experian, Equifax, and TransUnion, to make sure there are no errors.
Consider A Barrister Mortgage
Securing a mortgage as a barrister might not be as straightforward as you expect, so it’s best to find a mortgage broker who understands the intricacies of a barrister’s income and can help you negotiate the best terms. For more information, you can see barrister mortgage options here and find out how you can secure competitive terms on property finance. Thanks to the specialist team at Advias, you can receive tailored mortgage advice for barristers, designed to guide you in navigating complex situations with the best course of action for your requirements. Their aim is to provide you with the flexibility to access the standard of property that you want.
Ensure Your Accounts Are Updated
It is crucial for self-employed applicants to update their accounts when applying for a mortgage. Therefore, it might be helpful to use a chartered accountant to ensure all of your details are accurate. In general, lenders want to see your last three years’ accounts, which provides them with a good idea of your income and future earning potential. However, even if you have a poor year in relation to income, most lenders will consider an average of your income over the last three years. The choice of lenders will become more limited, if you have less than three years’ accounts.
Understand Your Budget
When buying a new home, there is a list of fees you will need to consider, including the cost of taxes, insurance, movers, and solicitor fees. As a result, you should ensure you have enough to cover all major upfront costs. Lenders will also want to examine your bank statements, so it’s crucial to cut spending to a minimum. There are some practical steps you can take to save money, such as cancelling your gym membership, refraining from eating out, and reviewing other recurring charges.
Save For A Deposit
The larger the deposit you can save for, the more mortgage products you can choose from. Although it is possible to obtain a mortgage with a 5% deposit, the number of lenders you can access might be limited. You may also have to pay a considerably higher rate of interest than someone who has saved a 10% deposit or greater deposit. Therefore, once you’re aware of the amount of deposit you will need, it’s important to make a plan to reach this goal. If you’re going to be saving for a longer time, it might be better to open a longer term savings account.
Find A Property
You may want to register with as many estate agents as possible to ensure that many local agents are looking for your dream property. This means that as soon as something becomes available, they will let you know. Many reliable agents are likely to contact you before the property even lands on most search sites, as long as you are responding to their calls and emails. It might also be useful to set up email alerts across all major property websites, as some agents may only advertise on one or two of the main portals.
Make An Offer
Once you have found your dream property, it will be time to make an offer. The amount you should offer on a property will vary greatly between locations and the type of property you want to buy. For instance, if the property is priced well and there is lots of interest from other buyers, you may consider offering the asking price. However, if the property requires a lot of refurbishment work, you may want to offer below the asking price.
This post contains affiliate links, which means I may receive a small commission, at no cost to you, if you make a purchase through a link