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Mortgage with Overseas Income

Can you get a mortgage if your earnings are from overseas? Find out here

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 22nd November 2019 *

Are foreign currency mortgages possible in the UK?

If you only have overseas income, you may well have had
trouble finding a UK mortgage. This is because the majority of lenders in the
UK only consider income earned in the UK, paid in pounds sterling. Many lenders
generally consider both the currency exchange and less familiar employment
sectors a greater risk.

Foreign currency income may be harder to verify, with
additional checks taking time and resource many lenders just don’t want, or
need, to entertain.

Thankfully, there are mortgage lenders who will consider
a range of foreign incomes, which is what this article will cover. Read from
top to bottom for all the details, or click a link to jump straight to the
information you’re after:


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Which currencies are acceptable?

Having established that there are lenders willing to
consider giving borrowers a UK mortgage based on income from various countries
around the world, you simply need to find the right lender for your specific
set of circumstances.

Below is a list of a few of the currencies some UK
mortgage lenders will consider:

  • Euro (EUR)
  • US Dollars (USD)
  • Yen (JPY)
  • Australian Dollar (AUD)
  • Polish Zloty (ZL)
  • Russian Ruble (RUB)

What are the main factors affecting overseas income mortgage applications?

The main areas that impact lending decisions and whether
someone earning foreign income would be approved for a mortgage are:

  • Is the applicant employed or self-employed abroad? (If self-employed, is the company registered in the UK?)
  • The currency the income is paid in
  • The country the work is carried out in
  • The location / name / size of the company / organisation the income is paid from, and if they also have branches in the UK or, if not, whether the company’s accountancy firm does
  • The location / name / size of the bank / organisation account the income is paid into, and if they also have branches in the UK
  • Where the tax is paid (UK or country of origin)
  • The length of employment / time the income has been paid
  • The type of work / stability of the sector the applicant works in
  • The amount and source of deposit (and which country it is currently held in)

As well as making sure you meet general affordability criteria, other criteria a lender will take into consideration are:

  • Whether or not the borrower
    has any adverse credit
  • The location of the
    property, and viability of the “story” to ensure suitable lending
  • The purpose for lending
    (Residential / BTL / commercial etc.)
  • The property and tenure type (flat / house; freehold /
    leasehold)

Will my employment status be an issue?

For employed workers earning income paid in overseas
currency, there are far more lenders available than to those who are
self-employed.

In fact, there’s only a small number of more specialist
lenders willing to consider overseas self-employed mortgages. This is probably
due to the increased difficulty in being able to establish and verify actual
earned disposable income and calculate reasonable affordability.

Tax systems are completely different country to country,
and for a UK lender to effectively understand liabilities for multiple areas is
often too big an ask and, ultimately, not worth a lender’s time and trouble.

As a result, if self-employed income is earned overseas
then lenders will almost always require the company to be domiciled in the UK,
with full accounts drawn and tax paid on income as if it were from the UK.

There may be exceptions to this rule. A small number of
mortgage lenders will, on a case-by-case basis lend to borrowers with the right
business case who can provide enough evidence to satisfy lenders that approval
is appropriate.

Will the currency of income earned impact mortgage approval?

Yes, the currency you earn your income in can have a
direct affect on whether you can get the mortgage you want.

When it comes to your earnings, one of the first things a
lender will ask is what currency you earn your income in.

While all UK lenders will consider income paid in GBP, only
a handful offer euro mortgages and there are even fewer lenders offering
mortgages based on US Dollars and fewer still for income in Japanese Yen.

If you have been declined because your income is paid in
any kind of foreign currency, this doesn’t mean there aren’t other lenders out
there for you.

We work with expert brokers with experience in helping
other customers earning their income in currencies other than the British
pound. They are whole-of-market brokers with access to specialist lenders and
they know which lenders will offer mortgages to people who don’t fit the
typical profile.

Make an enquiry for a free, no obligation chat and we’ll match you with a broker who specialises in this area.

How will the location of the work/job activity impact mortgage approval?

If you are employed in France, Germany or Spain your mortgage is more likely to be approved than it may be if you work in a country further away geographically, particularly if the country in question is under financial sanction.

This comes into whether the “story” of the situation is
feasible or not. For example, a lender will want to know if you are going to be
resident in the property or leave it unoccupied or let without consent, which
would infringe the terms of the mortgage. The lender will also be interested in
the strength of that country’s economy and whether the income is deemed to be
truly sustainable.

Could the overseas company I work for impact mortgage approval?

Again this comes down to risk. Lenders are more likely to
approve a borrower with foreign income who is working in a multi-national
company with a solid reputation in the UK, than for someone working in a spare
bedroom of a start-up.

It is far less likely that a large multi-national
business would put itself or its employees under any scrutiny from a tax or
revenue perspective, than a firm that has no ties to the UK whatsoever.

Common examples of approvals come from those who are
asked to work abroad in another arm of the business for a short term, such as
someone working on production for JCB in their manufacturing plant in China.

Could the way I’m paid have an impact?

If you are paid in overseas income in cash, it’s highly
unlikely to be approved by a UK mortgage lender without great reason, such as
the nature of the risk and difficulty to validate the source of funds. 

Most lenders would want to see the money you earn being
paid direct into a bank account.

If the bank is a recognised UK bank, all the better.
Generally, if the bank your income is paid into is in the UK, or has branches
in the UK, then this is considered lower risk for a UK lender considering a
borrower with overseas income.

If the bank is overseas and you transfer this money into
a UK account, then it makes a difference which bank you use.

Smaller, less known banks may be subject to different
regulation, support and security in certain countries overseas. And are,
therefore, likely to be considered higher risk when it comes to ensuring
transfers for mortgage payments are timely and legitimate.

If, for example, you work in the UK and Spain, for a
Spanish company, are paid in Euros through a Spanish account with Santander,
that you then transfer to a different UK account, lenders may consider this
lower risk, because of the common understanding the bank has of both UK and
Spanish markets and tax systems, as well as clear and reliable audit trails.

How the country in which you pay tax impacts foreign currency income mortgages

Most lenders considering overseas income require UK tax
to be paid.

If income is earned tax-free in a certain country and is
brought back into the UK, then self-assessment may be required to evidence the
income earned and tax paid accordingly.

If income is taxed at source overseas then any tax due
according to UK law needs to be adhered to.

If no tax is paid whatsoever, then most UK lenders will
decline the application, unless there is an acceptable and viable explanation,
in which case certain lenders may consider those with a strong business case,
regardless of your tax position.

How the length of employment can impact a foreign currency mortgage

As with any type of employment, lenders consider those in a role long term much less risk than those who have started in a new position.

Generally this is because a) the borrower may not perform
well and be fired, possibly within a probationary period, and b) the borrower
themselves may not get on in the role and want to leave. Both outcomes result
in a potential period with no income to support the mortgage.

Many lenders consider this a scenario outside of their
policy for several reasons:

  • Employment law
    overseas may be different
  • The borrower may not
    be subject to any compensation or notice periods
  • The borrower may
    struggle to adjust to a different working culture
  • Different markets
    and languages a borrower needs to adapt to
  • All sorts of other
    potential barriers that may impact the longevity of a borrower in a foreign
    company

However, once someone has been in their role for over 12
months, the risk of these things being an issue can be considered far lower.

Every lender is different in what industries they would
consider as “higher risk” but, in general, professionals working
internationally are deemed lower risk than lower skilled or manual jobs.

For instance, someone employed as a part-time medical
consultant in the US, paid in dollars, may be less risk than someone selling
tulips for a Dutch florist paid in euros.

Is deposit size a factor?

It’s not uncommon for those paid in foreign income to
also have their deposit held overseas.

If your mortgage deposit is held in a recognised bank account with a clear audit trail of the build-up of funds, then similar rules apply as to the name/size/location of the bank the income is paid into. Typically, if the bank has UK branches it’ll be accepted by most lenders, if not then further checks may be needed to ensure the funds meet all anti-money laundering requirements.

For specific requirements we suggest making an enquiry and one of the expert advisors we work with will review all the potential problem areas prior to submitting an application.

Will bad credit affect my application?

If there’s previous bad credit showing on your credit
file, then this can limit the options available to you.

Below is a list of potential credit issues you may be
faced with as a borrower:

  • Adverse credit overview
  • Low credit score
  • Mortgage Arrears
  • Defaults
  • County Court Judgements
    (CCJs)
  • Individual Voluntary
    Arrangements (IVAs)
  • Debt Management Plans
    (DMPs)
  • Bankruptcy
  • Repossession

Generally, the smaller, less severe, older the issue, and the larger the deposit, the more chance there is of approval. For more on bad credit mortgages visit our specific mortgages for bad credit section here.

What else might affect a foreign currency mortgage in the UK?

Multi currency mortgages

There can be very complex requirements if you are intending to pay a mortgage through multiple currencies. This requires expert advice that the brokers we work with could provide.

The location of the property, and viability of the “story” 

If the property is based in England and Wales there are more lenders available than if it were in Scotland or Northern Ireland.

If the property is based overseas then this is classed as
an overseas purchase. Generally,  only
those lenders considering overseas mortgages will accept applications on
overseas products.

The purpose for lending 

For many lenders offering both residential and buy-to-let mortgages, there can be a completely different set of lending criteria. Commercial lenders may be more considerate of overseas income as they are also subject to different regulatory requirements.

The property and tenure type 

If you are buying or refinancing a traditional brick
built house in solid condition then its unlikely you’ll be restricted by any
lender due to the property type, tenure or construction material.

Those buying a freehold flat or a building with a
thatched roof however, may be restricted to the number of lenders that will
consider an application. Add to this a borrower with income paid in an overseas
currency and the number of lenders will be limited further.

This doesn’t mean borrowing is impossible however, just
potentially more difficult depending on the exact scenario, and only making an
enquiry with an expert is likely to shed light on all your options.

Speak to an expert on foreign income mortgages

If you have questions and want to speak to an expert for the right advice, call 0808 189 2301 or make an online enquiry for a free, no obligation chat.

We’ll match you with one of the whole-of-market mortgage
brokers we work with, ensuring they have experience of helping customers in
similar circumstances.

Updated: 22nd November 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Find out more about how we help people get mortgages with non mainstream incomes

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