Posted on 30 April 2018
I am a partner in a law firm so not under PAYE or traditionally self-employed, according to the lenders I’ve spoken to. What are my mortgage options?
A lot will depend on whether you’re an equity partner or not, however either way there are lenders who’ll be happy to help.
You’ll likely be treated as “self-employed”, if you’re not under the firms Pay As You Earn (PAYE) scheme, which is unlikely to have a negative impact on your borrowing potential or mortgage options but can make the application process somewhat more torturous if the wrong lender is approached.
Lenders will typically want to see your Partnership Agreement/Contract along with a copy of your latest 2 to 3 years personal tax returns in the form of a document called an SA302 which you can obtain from HMRC.
If you haven’t been a partner for that period of time, or have changed law firms, we can often arrange for a lender to take your previous years earnings into account which will negate the need to demonstrate any period of time working as a partner.
We come across a lot of people in your position who perhaps aren’t able to demonstrate the required income levels to satisfy the more algorithmic lenders affordability assessments and therefore have their maximum lend restricted. If that’s the case for you we can often work with the lender to ensure that less traditional/widely accepted income proofs are accepted, such as any money reinvested into the business.
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Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.