A seafarer mortgage, also known as a maritime mortgage, is a type of mortgage designed specifically for seafarers and other maritime professionals who may find it challenging to obtain a standard residential mortgage due to their unique employment circumstances.
Challenges for seafarers getting a mortgage
Seafarers may face some challenges when trying to obtain a mortgage:
- Inconsistent income: Seafarers often have fluctuating income due to the nature of their work, which can make it challenging to demonstrate their ability to meet mortgage repayments.
- Non-UK tax residency: As you mentioned, seafarers who are not UK tax residents may find it more difficult to obtain a mortgage, as some lenders may require proof of income or tax returns.
- Length of time spent at sea: Seafarers may spend long periods of time away from home, which can make it challenging to attend mortgage meetings or provide the necessary documentation in a timely manner.
- Non-UK residency: Seafarers who are not UK residents may find it more difficult to obtain a mortgage, as some lenders may require a UK credit history or proof of UK residency.
- Limited employment history: Seafarers may have a limited employment history due to the nature of their work, which can make it more difficult to demonstrate their ability to meet mortgage repayments.
- Low credit score: seafarers who spend extended periods of time outside the UK may have difficulty building and maintaining a good credit score, which can make it harder to secure a mortgage or other types of credit.
Eligibility for seafarers
The eligibility criteria for seafarer mortgages can vary among lenders, but some of the factors that lenders may consider when assessing eligibility include:
- Permanent rights to reside in the UK: Lenders may require that the applicant has permanent rights to reside in the UK. This means that the applicant has been granted permission to stay in the UK indefinitely.
- UK residency: Lenders may require that the applicant lives in the UK for at least 6 months of the year. This is to ensure that the borrower is easily contactable and can attend meetings with the lender if necessary.
- Employment: Lenders may require that the applicant is employed by a UK or international company. This is to ensure that the borrower has a stable source of income.
- Domicile for tax purposes: Lenders may require that the applicant is domiciled in the UK for tax purposes. This means that the borrower is considered a UK resident for tax purposes and pays taxes in the UK.
- Income in sterling: Lenders may require that the applicant’s income be paid in sterling. This is to ensure that the borrower has a stable income in the UK currency.
What is an expatriate?
An expatriate (often abbreviated as “expat”) is a person who lives outside their home country, either temporarily or permanently, for various reasons such as work, study, retirement, or personal circumstances. Expatriates are usually citizens of one country who reside in another country, and may be employed by a foreign company or organisation. They may also be referred to as “international assignees” or “global nomads”.
What is the difference between an expat mortgage and a domestic seafarer mortgage?
An expat mortgage is a type of mortgage that is designed for UK citizens who are living and working abroad. These mortgages are designed to help expats buy property in the UK, either as a primary residence or as an investment property. Expats may face additional challenges when applying for a mortgage, such as differences in income, credit history, and residency status. Therefore, expat mortgages may have different eligibility criteria and application processes than traditional domestic mortgages.
Domestic seafarer mortgage
A domestic seafarer mortgage, on the other hand, is a type of mortgage that is designed specifically for seafarers who are based in the UK. Seafarers work on ships and spend long periods of time away from home, making it difficult for them to access traditional mortgage products. Seafarer mortgages are designed to help seafarers buy property in the UK, even if they are based overseas for much of the year.
How to get a faster mortgage?
- Find a specialist seafarer mortgage broker: Seafarer mortgages are a specialised type of mortgage, and not all mortgage brokers or lenders offer them. It’s important to find a specialist broker who has experience helping seafarers secure mortgages. You can search for specialist brokers online or ask for referrals from other seafarers or colleagues in the industry.
- Get your documents in order: To apply for a mortgage, you’ll need to provide a range of documents to the lender or broker. These may include proof of identity, proof of income (such as payslips or tax returns), bank statements, and details of any existing debts or financial commitments. Your broker can advise you on exactly which documents you’ll need to provide.
- Obtain an agreement in principle: An agreement in principle (AIP) is a statement from a lender that they would be willing to lend you a certain amount of money based on your income and other financial information. This is not a formal mortgage offer, but it can be helpful to have an AIP in place before you start house hunting. Your broker can help you obtain an AIP from a suitable lender.
- Apply for the mortgage: Once you’ve found a suitable property, you can apply for the mortgage itself. Your broker can help you complete the application and submit it to the lender. The lender will assess your application based on a range of factors, including your income, credit history, and the value of the property.
How is income calculated for Seafarer mortgages?
It’s common for lenders to apply a ‘worst case’ exchange rate when assessing the affordability of a mortgage for someone who is paid in a foreign currency, such as euros. This is to account for the possibility that the exchange rate may fluctuate in the future, which could affect the borrower’s ability to make their mortgage payments.
For example, if someone earns €100,000 per year, a lender may use the current exchange rate (e.g. 0.9 euros to the pound) to calculate their income in pounds. They may then take 80% of this figure (e.g. £72,000) as the maximum amount they are willing to lend to the borrower.
Can I get a mortgage as a seafarer if self-employed?
Yes, it is possible for self-employed seafarers to obtain a mortgage, although the process may be slightly different from that of employed seafarers. Lenders will typically assess the affordability of the mortgage based on the borrower’s income and other financial factors.
For self-employed seafarers, lenders may take an average of their last two years’ SA302s (the summary of income and tax paid that is submitted to HMRC) to calculate their income.
How much deposit do I need for a seafarer mortgage?
The deposit required for a seafarer mortgage is generally the same as for a standard mortgage, which is typically around 5-10% of the property value.
Best lenders for seafarers?
Many lenders offer mortgage products specifically designed for seafarers who may face unique challenges due to their profession, such as irregular income patterns and extended periods away from home. Some mainstream lenders, such as NatWest and HSBC, have dedicated mortgage offerings for seafarers, while there are also specialist lenders that cater exclusively to this demographic.
What documents do you need?
As a seafarer applying for a mortgage, the exact documentation required may vary depending on the lender and the type of mortgage product you are applying for. However, here are some general documents that you may need to provide:
- Identification documents: This includes your passport, driving license or any other government-issued photo ID.
- Proof of address: This can include utility bills, bank statements, and a rental agreement that shows your current address.
- Proof of income: If you are employed, you may need to provide recent payslips, a letter from your employer, and/or your employment contract. If you are self-employed, you may need to provide tax returns, SA302s, and/or an accountant’s certificate.
- Bank statements: You will likely need to provide bank statements that show your income and expenses over the past few months.
- Deposit: You will need to provide evidence that you have the necessary deposit for the mortgage you are applying for.
- Seafarer’s discharge book: This document serves as proof of your seafaring experience and qualifications.
- Credit history report: You may need to provide a credit history report to show your creditworthiness.
What mortgage products are available to seafarers?
Yes, seafarer mortgages are similar to standard mortgages and the types of mortgages available are the same, such as fixed-rate, tracker, variable, and interest-only mortgages. However, seafarers may face different criteria for affordability due to their unique income patterns, which could result in fewer options with lenders and potentially higher interest rates. It’s important to research and compare different mortgage products to find the most suitable one for your needs.
How can I improve my chances of getting a mortgage as a seafarer?
Here are some tips to improve your chances of getting a mortgage as a seafarer:
- Maintain a good credit history: This means paying your bills on time, keeping your credit utilisation low, and avoiding defaulting on loans or credit accounts.
- Save for a larger deposit: A larger deposit can help to reduce the amount you need to borrow and can make you a more attractive borrower to lenders.
- Provide evidence of stable income: Even though seafarers may have irregular income patterns, it is important to provide as much evidence as possible of your income and employment stability. This can include payslips, employment contracts, and bank statements.
- Work with a specialist lender: There are specialist lenders who cater specifically to seafarers, and they may be more willing to work with you and understand the unique challenges of your profession.
- Seek professional financial advice: A financial advisor can help you understand the mortgage process and provide guidance on how to improve your chances of being approved for a mortgage.
- Ensure your paperwork is in order: Make sure you have all the necessary documentation ready, such as your Seafarer’s discharge book, identification documents, and bank statements. This can help to speed up the application process and make you a more attractive borrower to lenders.
- Consider a joint application: If you have a partner or spouse who is also earning income, you may want to consider a joint application. This can increase your combined income and improve your chances of being approved for a mortgage.
How can Strive Mortgages help with a seafarer mortgage?
A mortgage broker can be very helpful in securing a mortgage for a seafarer. Here are some ways that a mortgage broker can assist with the mortgage process:
- Provide advice on lenders: Mortgage brokers have access to a wide range of mortgage products from different lenders. They can advise you on the lenders who are most likely to offer a mortgage to seafarers and can help you to compare different products to find the most suitable one for your needs.
- Help with paperwork: Mortgage applications can be complex, with lots of documentation required. A broker can help you to gather all the necessary paperwork and ensure that it is completed correctly, which can reduce the risk of delays or rejection.
- Negotiate on your behalf: A mortgage broker can negotiate with lenders on your behalf, which can be particularly helpful for seafarers who have unique income patterns. They can explain your situation to lenders and advocate for you to help you secure the best possible mortgage.
- Provide ongoing support: Once your mortgage application has been approved, a mortgage broker can continue to support you throughout the process. They can answer any questions you have, help you understand the terms of the mortgage, and ensure that you are fully prepared for each stage of the process.
- Save time and stress: Applying for a mortgage can be time-consuming and stressful, particularly if you are working as a seafarer and have limited time on shore. A mortgage broker can handle much of the process for you, which can save you time and reduce stress.