Trinity in The Times - Why mortgage lenders are showing some athletes and footballers the red card
Footballers are famed for their bumper salaries and their mansions, but it is not easy for all players to secure a mortgage because they are not so handsomely remunerated.
While many of the Premier League football clubs have private bankers assigned to them to help their players invest their funds and secure mortgages, lower league football players and athletes either go through contacts their agents know or apply for their own finance.
Mortgage lending rules implemented more strictly by high street lenders were designed to stop irresponsible lending after the 2007 financial crash — so the lenders require banks to stress-test affordability and examine future career plans much more carefully. This makes it harder to qualify for many sportspeople, mainly because they will technically be retiring a young age.
With many Championship footballers earning tens of thousands a week, many League One and League Two footballers earn roughly £40,000 to £100,000 a year, and they have borne the brunt of the clampdown because they have limited prospects after their mid-thirties. Lesser-known Olympic athletes, who are unlikely to have earned a lot of money, even if they have been highly successful, have also been turned down for home loans.
Aaron Strutt, a mortgage broker at Trinity Financial, told The Times: “Bigger lenders tend to have a tick-box mentality. Unless you speak to the right person within the bank who can potentially nod something through for you, the reality is it’s often not going to happen. As a mortgage adviser, you only go to the smaller building societies if you get knocked back by bigger banks.
“Lots of the lenders say they offer sportspeople mortgages, but in reality, they are not always very flexible. They either offer a shorter-term, making the repayments unaffordable or refuse the application if they are not comfortable that the applicant will get another job earning the same amount after they retire.”
Call Trinity Financial on 020 7016 0790 to secure a sports mortgage or book a consultiation
If you’re an athlete working freelance or a lower league footballer, you must demonstrate that you have a clearly defined future career path. “If they plan to go into coaching or another role generating a similar income, they are more attractive to lenders,” Mr Strutt says.
You should take action to boost your credit rating, save the biggest deposit you can and consider employing an accountant to sign off your taxes and accounts.
If you’re a wealthy footballer, musician or artist, who doesn’t want to buy a home outright, private banks are the most receptive to lending you money. While there are more mortgage options available to you, the lenders will still want to know how you will pay the mortgage when you retire.
It is possible to get a mortgage with a private bank if you have a small deposit. The rates are potentially very cheap, although you may have to make overpayments in larger chunks to get the debt down.
The lenders typically use the gross annual income from your contract and can lend up to five times your income.
They can use income generated from sponsorship deals, bonuses and investments.
If you are looking to use your income to invest in the buy-to-let property market you will typically need a deposit of 25% to secure a mortgage.
It is easier to secure a buy-to-let mortgage than a residential mortgage because the affordability assessment is based on the rental income the property generates.
Investing in property can result in an income into retirement and is the reason why many professional footballers take the property investment route.
If you are considering in the property market it is important to check with your accountant that is will make financial sense and whether you should set a limited company. The tax rules have changed and some landlords have sold their property portfolios to be more tax efficient.
In order to be able to provide you with bespoke mortgage advice and to submit an application to the lender we recommend, your adviser will need you to complete and send back our mortgage questionnaire and supply the following documents (for each applicant as applicable).
1) Proof of Identity (passport or driving licence)
2) Proof of address (posted utility bill, bank/credit card statement from within the last three months)
3) Proof of income (three months payslips if employed or last two years SA302 tax computations and tax year overviews if self-employed.
4) A copy of your contract(s)
5) Three months bank statements (full monthly statements showing salary credits, these can be online generated statements)
6) Proof of deposit funds (if this is a purchase)
7) A copy of your contract(s)
8) Information about your work plans and anticipated retirement age
9) A copy of your visa if you are a foreign national
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