Increasing the share and higher income for the partners of a law firm can motivate them to upgrade their property. In this case, the partners of a law firm may try to take advantage of this opportunity to get larger mortgages.
But lenders see a partnership in a law firm as a self-employment contract. This is because partners do not have fixed salaries, and usually, a large part of their income is through dividends and annual bonuses. So if they contact regular lenders, their mortgage application will be less likely to be approved, or they will be paid a small amount. They must also provide creditors with sufficient evidence to prove their income.
But some lenders are familiar with the income structure of law firm partners. Therefore, finding these lenders is one of the key steps for the applicants for these mortgages. Here are some suggestions on how to look for or get a mortgage as a partner in a law firm
Why Are Interest-Only Mortgages Common To Partners In Law Firms?
The main income of the partners of a law firm is their annual bonus and dividends. But many lenders do not take the annual bonus into account when calculating the mortgage amount. Lenders will, at best, receive a record of the borrower’s reward for the last two years or accept only part of their average reward value as their actual income.
Interest-only mortgages require the repayment of the mortgage interest, and at the end of the mortgage period, the borrowers will still be indebted as much as they have borrowed. Getting this mortgage also means that the monthly repayment of the borrowers is significantly lower during the mortgage period.
The partners of a law firm will face significant salary increases at different periods due to their annual bonuses and dividends. In which case they will have much financial potential. But repaying a large mortgage monthly will be difficult for a law firm’s partners. Because their income is not large until their annual bonus is paid. So interest-only mortgages are a popular financial solution for law firm partners. Because partners have much flexibility in repaying their mortgages.
The Importance of Using the Services of Brokers
Getting a mortgage as a partner in a law firm has many complexities and challenges. Therefore, using the services of brokers in this regard is important in many respects. In this section, some of the benefits of using broker consulting services are presented:
- Familiarity with a law firm’s partners’ income structures- Many lenders are skeptical of a law firm’s partners’ financial needs. In this regard, it is better to use the advice of a specialist broker because brokers have access to lenders who are familiar with these income structures. Therefore, the chances of applicants getting these mortgages will increase.
- Access to Lenders – Many lenders estimate the value of their mortgages at 4 or 4.5 times the borrowers’ income. But some lenders charge much higher rates to estimate the amount of mortgages they can make to a law firm. Finding these lenders is difficult and time-consuming; therefore, a specialized broker can save the borrowers time and money.
- Bargaining with Lenders – A professional broker will overview the borrowers’ total wealth and income path and negotiate with the lenders about the mortgage that reflects their financial potential. Professional brokers can connect borrowers with specialist lenders and private banks, and when others cannot afford it. An experienced broker can provide the best deals for applicants.
- Finding the Right Mortgages – An experienced broker can give borrowers the tips to find the right mortgages. A mortgage broker can take a comprehensive look at borrowers’ portfolios and recommend the best lending strategy.
- Proof of affordability – The partners of a law firm must prove evidence of their affordability to lenders. However, this is a difficult task that can be done successfully by using the advice of an experienced broker.
The Importance of Using AWS Mortgage Advisors
AWS Mortgage advisors can find interest-only mortgages for law firm partners and assist borrowers in preparing documents. AWS Mortgage advisors take a comprehensive look at borrowers’ wealth portfolios and recommend the best lending strategy to meet their financial goals.
Also, by using the services of AWS Mortgage’s experienced advisors, the partners of a law firm can prove their affordability more accurately.