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Steven from Mortgage Co joins the Mortgage and Protection Podcast to discuss the specialist area of mortgages for Seafarers.
What exactly is a Seafarer mortgage?
Those who work at sea often have unique financial circumstances compared to other employed or self-employed people, especially from a taxation perspective. They may also be paid in a different currency, especially if they are at sea in different parts of the world.
While they may spend a substantial amount of time on a boat, their residential address is in the UK and therefore they will need a UK mortgage.
What mortgage products are available to seafarers?
Broadly speaking they’re very similar, with Fixed-rate, discounted and tracker-rate mortgages all available. So they are the same products but how lenders assess your income will differ.
Some lenders will insist that you are paid in Sterling, which can make it more difficult to secure a mortgage if you’re paid in other currencies. It is possible however to find lenders who accept applicants who are paid in other currencies but it’s important to approach Mortgage Brokers like ourselves to help you find them.
How does the Seafarer mortgage work?
It will depend on how the applicant is paid and how long they are in the country. Those who have high earnings may be looked at in terms of high net worth mortgage products, although largely, standard mortgage products are used.
Some lenders have an acceptance criteria that states clients must be in the UK for a minimum of six months per year in order to consider their application. This can make it difficult for people that spend more than six months at sea to obtain a mortgage.
It also depends what type of contract they are on and whether they are employed or self-employed. This will determine what you would need to provide to support your income and the lender, as not all lenders will accept self-employed income from seafarers. It’s a niche area, so it’s important to find a lender who will consider your full circumstances.
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How much deposit will I need?
Exactly like an ordinary mortgage, it depends on the criteria of that lender. Some will lend up to 95%, so you would only need a 5% deposit, but 10% is more common.
How much can you borrow?
Again this is more or less identical as it would be for any other applicant, so between three and five times the annual salary of the applicant is typical. The only difference in terms of mortgages for seafarers are how long you’re out of the country and what denomination you’re paid in.
How do you prove your income for a seafarer mortgage?
Proving your income depends on your contract of employment. If you are employed directly and paid as a PAYE employee, the lender would need your last three months pay slips and your latest bank statement. If you’re self-employed, your latest two years of accounts and tax calculations would be required.
How can a Mortgage Broker like Mortgage Co help with a seafarer mortgage?
As it can be difficult to source lenders that will accept your mortgage application depending on your circumstances as a seafarer. Mortgage Brokers like ourselves can help to ensure that you approach the lender that most closely matches your individual circumstances and help to improve your experience of securing a mortgage.
For advice in this area or any other mortgage related subject, get in touch via the email address or telephone number on the website. We will be happy to advise on how much you can borrow and approach all the different lenders on your behalf.