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Can I Use Foreign Income to Qualify for an Expat Mortgage?

Whether you’re a UK national living overseas, or a foreign citizen trying to purchase a property in the UK, a lender will need to assess your income before they can make you an offer.

Foreign currency mortgages are complex because most mortgage providers will only consider earnings originating in Britain, paid in sterling, and into a UK bank.

It’s also quite difficult to demonstrate your income if it’s in a foreign currency because exchange rates will fluctuate, and many mainstream lenders won’t take the time to put into the assessment process.

Specialist expat mortgages lenders are a better bet, and we’ve explained a little in this guide about how they’ll assess your foreign income when deciding whether to lend.

What Currency Income Counts Towards an Expat Mortgage Application?

While not exhaustive, most expat mortgage brokers will consider applicants who receive their income in Euros, US Dollars, Yen, Australian Dollars, Polish Zloty or Russian Rubles.

If you work for a large company with UK branches, it may be easier to qualify, and if your overseas bank has a presence in Britain that can verify your income, it may also help the assessment process.

Expat mortgage lenders will also look into:

  • Whether you are employed or self-employed, and in which country.
  • Where you primarily work and pay taxes.
  • How long you’ve been employed for, and the stability of your role.
  • The deposit you have available, in which currency and country.

The usual affordability criteria also apply, so a lender will review your credit record, the property in question, and what you’re buying for – a residential property, buy-to-let investment or commercial premise.

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Employment Status and How it Impacts Expat Mortgages

Applicants employed and earning their wages in another country are usually an easier lending prospect than someone self-employed.

That’s because the lender can check your payslips, review your employment contract, and be reasonably assured your financial circumstances won’t suddenly change.

Very few specialist lenders consider expat mortgages for self-employed people earning their income overseas, as it is difficult to establish or verify income accurately and use that to calculate risk.

It’s important to confirm where you work and pay taxes because tax systems vary considerably, so a UK lender will have to assess how much of your income you’ll reasonably take home and have available to pay your mortgage repayments.

Lenders will almost always insist that the business be registered in the UK with full sets of trading accounts and tax returns for self-employed expats.

However, niche lenders can assess each applicant on a case-by-case basis and make exceptions if there are enough compelling reasons to go ahead.

How Does My Work Location Affect My Expat Mortgage?

The closer your place of employment, the better – expats in France, Germany or Spain, for example, are usually approved over expats further afield, particularly people who live or work somewhere with financial sanctions.

A lot depends on the specific scenario, so:

  • Are you going to live in the property or let it out?
  • If you’re letting it, are you applying for the right buy-to-let mortgage?
  • How stable is the economy where you live?
  • What is the likelihood you’ll default on the mortgage?
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An expat mortgage lender will also want to know whom you work for. Multinationals with solid UK reputations are the easiest bet since a mortgage provider won’t have any way to assess the viability of a start-up or unknown entity.

Do I Have to Be Paid Via Bank Transfer to be Eligible for a UK Expat Mortgage?

Most British employees are paid monthly via the BACs system – but that isn’t always the case overseas.

Any expats paid in cash may find it very complicated to prove their income or be approved for a mortgage since the lender doesn’t have any way to check on your source of funds.

Therefore, you should have your salary paid into a bank account if you plan to apply for a mortgage.

Banks with branches in the UK or British lenders with branches overseas are a lower risk for the lender.

What Deposit Will I Need for an Expat Mortgage?

If you’re paid overseas, likely, your deposit funds will also be held in a bank account abroad, which is the next potential stumbling block.

Mortgage deposit finances held in a recognised bank, with a clear audit trail or paperwork to demonstrate the origin of those funds, are fairly well accepted.

However, if you don’t have any records to show how you have built up a deposit or where the capital came from, you may not pass mandatory money-laundering checks.

For further advice about applying for expat mortgages with foreign-sourced income, please get in touch with Revolution Brokers on 0330 304 3040 or at info@revolutionbrokers.co.uk.

Our independent, whole-of-market advisers will assess your circumstances and identify the best way forward to mitigate lender risk and get your expat mortgage over the finish line.

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