Mortgages for Sports Professionals
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Mortgages for Sports Professionals
Richard Campo explains how mortgages for sports professionals work.
The content contained within was correct at the time of publication but is subject to change 20/09/2023.
What types of mortgages are available for sports professionals?
The structure of a mortgage is always the same. Whether you want a fixed rate, tracker, repayment, interest-only, that’s all fine. What we’ll talk through in detail is how the assessment works. That’s the tricky bit.
Once a bank says yes to you, you have access to all their products. The main thing is to make sure we ask the right questions to present you the right way. Then you can really pick whatever mortgage you want – it’s just the normal advice process we go through with anyone.
How do mortgages specifically for sports professionals differ from regular mortgages?
It’s all around the assessment. Affordability is the big thing – the income, and particularly in sports, the sustainability of that income. It’ll be things like your track record, contract length, your age, what sport you’re doing and whether there are ancillary incomes through sponsorship, advertisements, etc.
It’s not just one thing. It gets down to factors like whether you’re a high profile player, your history of injury and things like that. But we know our way around this – that’s what we probably spend most of our time on with clients in this space.
What is the maximum loan amount I can qualify for as a sports professional?
There’s no maximum whatsoever. The obvious example is a premier league footballer – and everyone knows what the income is like there. That’s true in many sectors, if you’re at the top of any sport.
I’m a big boxing fan and the money these guys get is unbelievable. If you watch At Home with the Furys on Netflix, they’re in a different car every time. So the good thing is, at the top end you can actually borrow a lot. There’s no maximum.
We’ll come on to this in a minute, but private banks do love sports professionals. There are whole divisions for sports and entertainment professionals in private banks. So once you get up to the top end it actually gets easier.
Can I get a mortgage if I have an irregular income due to my sport?
Yes, and that’s perfectly common. A professional football striker might get a goal bonus. It all goes to granular detail but it’s the same in any sport. Some banks would look at your two or three year track record and also the forward-looking contract.
So don’t worry about any irregularities – that’s no different from someone who’s self-employed in any other sector. Banks are perfectly comfortable with that.
What documentation do I need to provide as a sports professional when applying for a mortgage?
It’s a bit different to the norm, actually, and your contract’s the key thing. Quite a lot of sports professionals are set up as limited companies, which can actually be a bit easier. You’ll be treated as limited company director or a contractor – and we have podcasts on both of those on our website if you want to get into that in more detail.
We will look at two or three years of your accounts. It depends on the structure, but primarily you’re looking at accounts or the contract being the main thing.
Can my earnings from endorsements or sponsorships be considered in the mortgage application process?
If you set up a limited company, all your income goes through that. In the boxing example, your costs, your S&C, your trainers, all that stuff that all comes out and is captured through the accounts.
Something that’s really helpful if you’re not running a company is your SA302 – your self-assessments. These give a really clear breakdown of income so it’s a brilliant document to get. We might need those, or your accounts, or both depending on the individual.
Are there any special considerations for retired sports professionals applying for a mortgage?
Banks are interested in that sustainability of income. They want to know what you are doing next. Will you go into coaching, or become a pundit perhaps? I’ve got one client who’s got a very big property portfolio. He’s effectively a landlord and a developer which gives us a clear path.
Being retired is secondary – banks are more interested in that forward-looking income. If you’ve had a very successful career and you have a lot of assets, we can look at the private banking model where we can leverage shares, investments etc. So even if you don’t have a clear income now, if you’ve built up a lot of assets during your time playing we can still use that.
Can I use my future earnings of security for a mortgage as a sports professional?
Yes, we can. If you land a nice big contract, we can work on that. Typically people get transferred with an increase in income so that is often a catalyst for looking at getting a mortgage – for example, I’m a AFC Wimbledon fan and we’ve had a young player that’s just been signed by Manchester City. He’s 16 years old, so good luck to him – that could well be high on his list to buy a property or two
When you sign a new contract we can work on that basis, and that can include endorsements and advertising, all sorts of things. What’s coming down the track is very important in this space.
What factors do lenders consider when assessing the affordability of a mortgage for sports professionals?
It’s the usual things. In any income assessment, age is a factor, sustainability of income is a big factor, and then there are the classic things like your outgoings. Do you have children, school fees, other outgoings like debts or car loans?
My daughter is quite a good footballer and she was at Fulham recently – all the players were arriving and literally they all have brand new, white cars. These sports cars are all financed and they will count in your affordability.
Are there any special mortgage products or deals available exclusively for sports professionals?
It’s again around the assessment of income. We find really good underwriters in private banking have whole teams for sports and entertainment clients. There are no specific products as such, but it can really help to speak to the right people.
Do mortgages for sports professionals typically have different interest rates or fees?
There’s a big misconception here. Once the bank says yes, you’re in – and you can pick whatever product you want. Some banks do insist that you take a five year fixed rate for example, because they want certainty that you can afford the payments over that period.
It might be tied in with a contract. Another high profile example of late is Chelsea getting people on long, five, eight or 10 year contracts. A bank might only lend to you for the duration of the contract, so that’s something to bear in mind.
If you can tie that in with a fixed rate, that can be a good idea. So there are no specific products as such, but you might find there are stipulations around what you can do and how it’s structured.
How can I improve my chances of getting approved for a mortgage as a sports professional?
It’s all the classic stuff that’ll be on any podcast – pay your bills on time, try and build up some savings. You can’t change your age. You can’t change your income but if you can save up money, pay off your debts, be good and do all the stuff your parents told you to do – it really helps.
What happens if I am unable to meet my mortgage payments due to injury or retirement?
Bluntly, it’s the same for everyone. The risk is that if you don’t make the payments, the bank takes your home. This is why we always talk to clients about insurance.
Most sports professionals are really tuned in to this and it’s actually an easier conversation. Hopefully that’s something that’s in place already. If not, we can organise it for you and hugely mitigate that risk.
If you’re unfortunately not in that position and you’re having problems, talk to your bank. Speak to us first, we’ll point you in the right direction, then speak to the lender. Something came out recently called the Mortgage Charter which gave banks very clear direction about dealing with people in this situation.
You can delay payments, go interest-only etc. So the best thing to do is not to ignore it – deal with it as quickly as possible. Ideally, be insured, but if not, we will do our best to help you.
Are there any specific mortgage options for sports professionals with non-UK residency?
Yes and no – there are no specific products but there are banks that do it, particularly international lenders and private banks. They’re very willing to work in this space. Again, it tends to be more in the high net worth area. If you’re in this situation we can 100% help. It just goes down to the detail as I mentioned before.
Can I use my sports career as an asset or collateral when applying for a mortgage?
If you have built up assets we can absolutely use that. Sadly, you can’t just use your name. I can’t mention who it was, but we had a high profile pop professional who wanted to borrow with us – she was well known but just didn’t have the income to get what she wanted.
Thankfully sports do pay well, so normally there’s something there – but it’s all about what have you built up in the past and what’s the income going forward. That’s what we can work on.
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How does the age of a sports professional impact their eligibility for a mortgage?
It’s really simple – the older you get, the more difficult it becomes. In the sports world, 30 is old, which is brutal. I’m 42! The science around it is that your twitch fibre starts to deteriorate after you’re 30.
Wladimir Klitschko was boxing in his 40s and looked unbelievable. Now I’m 40 I don’t look anything like that! It’s just a brutal reality of life. If you’re a player coming toward the end of your career, you have to think about what’s coming next. It’s a factor, but it’s not a show stopper by any stretch.
Are there any tax implications I should be aware of when obtaining a mortgage as a sports professional?
I don’t give tax advice, but if the mortgage is on a property you live in – a residential mortgage – there are no tax connotations whatsoever.
If you’re buying it as an investment, that’s Buy to Let, and I suggest you listen to the Buy to Let podcast on our website, which talks about that in detail. You might want to think about setting things up through a company – and we’ve got a limited company Buy to Let podcast to explain the benefits of that.
What are the potential risks or challenges sports professionals face when applying for a mortgage?
Aside from the fact that assessment is more complex, the big risk is always career-ending injuries. I remember so clearly to this day when a Coventry City player snapped his leg in two – it was horrific, don’t Google it because you can see the pictures really clearly. Of course the poor lad’s career ended aged 19 or 20.
I like rugby and boxing personally and there are huge risks around that, although these days it is a bit less. There’s S&C, recovery is really good, there’s more around nutrition – it’s so much better than it was. Clubs look after people way better than they used to.
But that’s risk vs reward. The rewards are phenomenal, but the risk is that you are literally putting your body on the line.
Can I get a mortgage if I am self-employed as a sports professional?
The assessment is pretty much akin to being self-employed, anyway. If you set yourself up as a limited company you’ll get your contract paid into that – and you are self-employed by default. Even if you are on the books with a club, the usual contract will mean you are still treated as self-employed.
Don’t let that put you off – banks lend to self-employed people day in, day out. It’s not negative in the slightest.
Is it possible to include my performance related bonuses or incentives in my mortgage application?
I’ve talked about this already so I won’t rehash it, but yes, it’s absolutely all factored in and is again positive.
Do mortgages for sports professionals have different repayment terms or options?
We’d have a conversation with you around the ideal structure. Do you want it penalty-free, do you want to fix it, all that. There are sometimes stipulations around a clause in your contract, the length of the contract etc. That can sometimes have a bearing on the product that’s offered.
Are there any mortgage providers or brokers that specialise in serving sports professionals?
Yes, we do that. We’ve gone the whole hog in sponsoring Wimbledon Football Club this season and we work with the guys there. We’ve got many clients who are premier league footballers and other sports professionals.
There’s so much money in so many areas is unbelievable. I talk about boxing quite a lot now because the money’s just phenomenal compared with what it was even ten years ago. It’s a fascinating area.
I’m a huge sports fan, so to chat about sport when doing my job is unbelievable for me. I get to meet some amazing people and sports people are pretty switched on. To give you comfort, we know how to do this and we’ve done it time and time again.
Experience counts so much in this area because people are busy. Don’t waste your time. The team and I do take a lot of pride in helping people in this area.
What impact does a sports professional’s level of international competition have on mortgage eligibility?
It’s generally positive. It can get a little bit complicated in residency rules – for example, if you spend more than 90 days outside the UK, and whether you are paying UK tax.
Some people aren’t resident for tax purposes. It’s not an issue, we can work around it. Generally, if you’ve got an international profile you’re a higher earner, so it’s not a bad thing in the slightest.
Are there specific mortgage options for sports professionals who frequently travel for tournaments or events?
No, but we can talk to you about what your preferences are around this.
What happens to my mortgage if I need to relocate to another city or country for my sport?
If it’s not feasible for you to live in the property any more, you can get what’s called Consent to Let from your provider. They are normally quite happy to let you rent out the property until you return back to it. That’s a well-trodden path within mortgages – it’s not an issue at all.
How can a mortgage adviser assist me in navigating the unique challenges of obtaining a mortgage as a sports professional?
It’s really just about experience and knowing what you’re doing. It’s not as simple as just going to the bog standard high street lenders and asking for a mortgage.
You do need to know the right underwriter in the right bank, or you won’t get the right outcome. At the higher end, looking at private banking and international lending, it’s complex and time consuming. So the best thing to do is get a specialist in this area.
Give us the information we need, as early as you can and we can speed up the whole process. Then you can focus on earning phenomenal amounts of money or getting ahead in the game – because that’s what it’s all about.
Your home may be repossessed if you do not keep up with your mortgage repayments.
The content contained within was correct at the time of publication but is subject to change 20/09/2023.