Law firm partners receive a base salary and their share of profits.
In most cases, this is paid as a bonus or dividends on a quarterly or annual basis but will banks accept this income for a home loan?
How much of my income will the bank use?
- Typically, 100% of your base income and 80% of partnership income will be considered (evidence required.
- This varies between lenders and, if it’s beneficial to do so, we may push to have you assessed as self employed.
- Some lenders require tax returns from the law firm if you own more than 25%.
- For firms that operate internationally, the currency of the bonuses may affect the percentage used by lenders.
- Lawyers are highly sought after by select lenders and will offer you 90% waived LMI and discounted interest rates that will save you thousands off your home loan.
Call us on 1300 889 743 or fill in our free enquiry form to discover if you qualify for a law firm partner home loan.
Income for self-employed partnership
You’ll need to provide the following home loan documents to prove your law firm partnership income:
- Your last two years personal and partnership tax returns.
- If you can’t prove your income you should consider a low doc loan.
- Some expenses such as depreciation, interest and one off expenses are added back which can greatly improve your borrowing power.
Easier income verification with select law firms
Select lenders will consider just a letter from your employer as proof of your income if you work for one of the following law firms:
- Ernst & Young
- KPMG
- Minter Ellison
- Allens Arthur Robinson
- Henry Davis York
- Gadens
- Freehills
- King & Wood Mallesons
- Clayton Utz
- Deloitte
- PKF
- McGrath Nicol
- PWC
- Grant Thornton
The currency of your bonuses matter
It’s common that bonuses for international firms are paid in a different currency to Australian dollars.
Lenders have very strict policies when it comes to accepting foreign income for a home loan.
In most cases, they will use 80% of your bonus income and prefer the following denominations:
- Great British Pound or UK Sterling (GBP)
- Euro (EUR)
- Hong Kong Dollar (HKD)
- New Zealand Dollar (NZD)
- Singapore Dollar (SGD)
- United States Dollar (USD)
- Canadian Dollar (CAD)
- Indian Rupee (INR)
- Indonesian Rupiah (IDR)
- Chinese Yuan Renminbi (CNY)
- Japanese Yen (JPY)
- Danish Kroner (DKK)
- Philippine Peso (PHP)
- Samoan Tala (WST)
- South African Won (ZAR)
- South Korean Won (KRW)
- Sri Lankan Rupee (LKR)
- Swedish Krona (SEK)
- Swiss Franc (CHF)
- Taiwan New Dollar (TWD)
- Tongan Pa’anga (TOP)
- Ni-Vanuata Vatu (VUV)
If your currency is not on the above list, some lenders may accept other currencies depending on the overall strength of your situation.
In some cases, the lender will accept foreign business income under a low doc solution where you’ll provide a accountant’s letter as verification.
Do you need barristers chamber finance?
We can help you borrow up to 60% of the value of the shares in a barristers chambers or up to 100% with the use of a guarantor loan.
For your current practice, some of our lenders can use up to 60% of the projected income of your practice based on a 12 month rolling basis.
Check out our barristers chambers page for more information.
Discover how we can help you
Call us on 1300 889 743 or fill in our online enquiry form and we can find a lender that will take a common sense approach to your law firm partnership income.
We can maximise your home loan borrowing power!