Tailored Mortgage Advice for Seafarers
If you’re a seafarer, whether you serve on tankers, cargo ships, yachts, ferries, merchant navy vessels, or cruise liners you may face unique challenges securing a mortgage due to irregular income, foreign-currency pay, and lengthy periods away at sea.
At Kerr & Watson, we assist in helping seafarers get mortgage-ready.
Can Seafarers Get a Mortgage?
Yes, with some lenders, seafarers can get a mortgage. However, due to the irregularity of income, foreign currency payments, and time spent away from home, the process may involve additional checks compared to a traditional mortgage application.
Lenders often view seafarers workers as higher risk due to these factors, but that doesn’t mean securing a mortgage is always impossible.
Some lenders are happy to consider applications from offshore contractors including seafarers, though the process will often involve more documentation and proof of income stability.
This is where working with a mortgage broker, like Kerr & Watson, can make all the difference. We can connect you with lenders who understand your situation and offer the best possible terms.
Challenges Faced by Seafarers in Securing a Mortgage
As a seafarer, there are several unique challenges you may encounter when applying for a mortgage:
Fluctuating Income
Seafarers often experience periods of high earnings during contract seasons, followed by gaps between contracts. This irregular income can make it harder for lenders to assess affordability, as they typically prefer steady, consistent earnings.
Foreign Currency Payments
Many seafarers are paid in foreign currencies, which can complicate the mortgage process. Lenders may have specific criteria for accepting foreign income, and not all currencies are accepted. Exchange rate fluctuations can also impact affordability assessments.
Time Spent Abroad
Since seafarers spend significant periods outside the country, some lenders may question your residency status. This can lead to complications in proving eligibility for certain mortgage products.
Proof of Income
Seafarers are often required to provide additional documentation to prove their income. This could include contracts, payslips, and tax returns from multiple years, particularly if income is received from international employers.
Find out Your Options
How Are Searfarers’ Income and Affordability Calculated?
Lenders typically evaluate seafarers’ income in much the same way as they do for other borrowers, but with extra attention to detail due to the unique aspects of the profession. Here’s what to expect:
Income Proof
Lenders will want to see at least two years of consistent income. This might be challenging if your contracts vary in length and payment amounts, but you can prepare by providing:
- Contract: Showing your current and past contracts can help prove your long-term earning potential.
- Payslips and Bank Statements: Recent payslips and bank statements, especially those showing foreign currency payments, will be essential. If you’re paid in a foreign currency, some lenders may require evidence of how much that equates to in pounds sterling.
Currency Considerations
Many mortgage lenders will accept foreign currency income, but only certain currencies are widely accepted. If you are using a foreign currency to gain a mortgage, the lenders that accept them often apply a ‘haircut’ which is a percentage deduction from the gross amount, e.g. to account for risk of a drop in exchange rate devaluing the applicants pay in the UK.
Affordability Assessment
Like any other borrower, your income needs to cover your monthly mortgage repayments comfortably. This is known as an affordability check. Seafarers may face stricter scrutiny due to fluctuating income patterns, so it’s important to provide detailed financial records. We’ll help you prepare all the necessary documentation to demonstrate that you can meet repayment obligations. We have an affordability calculator that can give you an initial idea of affordability.
What Documentation Do seafarers Need for a Mortgage?
As a seafarer, your mortgage application may require more detailed documentation than a standard application. Be prepared to provide the following:
- Employment Contracts: Proof of current and future employment contracts will help demonstrate your income stability.
- Payslips: You may need to show payslips from the last three to six months, depending on the lender’s requirements.
- Tax Returns: If you work for international companies or earn foreign currency, you may be required to provide tax returns for the last two to three years to verify your income.
- Bank Statements: Personal and business bank statements showing your income deposits will be required to support your application.
- Proof of Residency: Lenders may request documentation proving that you have a permanent right to reside in the UK, especially if you spend significant time abroad.
These documentation requirements may seem complex, but at Kerr & Watson, we can help.
We’ll guide you through the process and ensure you have everything in order before submitting your mortgage application.
Property Options for seafarers
As a seafarer, you may have specific property needs depending on your work schedule and living arrangements. Here are a few options to consider:
Residential Mortgages
Residential Mortgages are the most common type of mortgage, where you purchase a home to live in. Lenders may require a higher deposit (typically around 10-15%) and may apply higher interest rates due to the perceived risk of irregular income. This is completely dependent on the situation and lender requirements so you should speak with a mortgage adviser.
Buy-to-Let Mortgages
If you’re looking to purchase a property as an investment to rent out, a buy-to-let mortgage may be an option. However, buy-to-let mortgages generally require a larger deposit (often 25% or more) and may come with higher interest rates or fees.
Second Home Mortgages
Some seafarers may want to purchase a second home for personal use. If you’re considering this, we can help you look for a suitable lender.
We’ll help you explore these options and find the best fit for your financial situation and long-term goals.
Conclusion
Securing a mortgage as a seafarer may seem complex, but with the right guidance and preparation, it can be achievable.
At Kerr & Watson, we have the expertise and resources to help you through the process, ensuring you get the best possible mortgage deal that suits your unique circumstances.
Whether you’re buying your first home, remortgaging, or investing in property, our dedicated team is here to offer personalised support every step of the way.
Contact us today for expert mortgage advice tailored to your situation.
