Mortgages for Seafarers in the UK: Everything You Need to Know

Imagine this: you’re a fully trained and experienced seafarer, with a steady income. You’ve been working hard for years, and you’re finally ready to buy your own home. But when you go to apply for a mortgage, you’re told that you’re not eligible.

Why is this? Because seafarers are considered to be a higher risk to lenders. After all, you spend a lot of time away from home, and you’re paid in foreign currencies. This can make it difficult for lenders to assess your income and creditworthiness.

But don’t worry, there is still hope. Here at Needing Advice, we specialise in helping seafarers get mortgages. We understand your unique circumstances, and we can help you find a lender that is willing to work with you.

Post Topics

Who are considered as Seafarers and what are the mortgage options available?

Why are mortgages for seafarers often difficult to get?

How much deposit will I need for a seafarer mortgage?

What proof of income will the lender need to see?

What else may I need to be eligible to apply for a seafarer’s mortgage?

As part of my proof of income, do I have to be paid in Sterling?

Next Steps

FAQs on Mortgages for Seafarers

Who are considered as Seafarers and what are the mortgage options available?

Generally, Seafarers are considered to be individuals who work or travel on boats, ships or other vessels for a living. This includes members of the Merchant Navy, navy personnel, and commercial fishermen.

When it comes to home loans for seafarers, there are several options available. These include standard mortgages, specialised mortgages designed for seafarers, and even government schemes to help you buy a home.

Standard Mortgages:

Standard mortgages are the most common type of home loan available, and they can be used by seafarers just like any other borrower. The key is to have a good credit history and be able to prove your income, so make sure you keep your paperwork in order.

Specialised Mortgages for Seafarers:

Specialised mortgages are designed specifically for seafarers, and they often come with more flexible terms and conditions. Lenders may be willing to overlook lower credit ratings or unusual sources of income, as long as you can prove you have a steady stream of earnings. They may also offer longer repayment periods or reduced interest rates to make the loan more affordable.

Government Assistance Schemes :

Depending on where you live, there may be government assistance schemes available to help you buy a home. These schemes can include grants or loans at reduced interest rates, and they’re specifically designed for seafarers.

Why are mortgages for seafarers often difficult to get?

The majority of mortgage lenders are accustomed to dealing with applications from individuals who have land-based jobs – on an employed or self-employed basis.

Their income derives entirely from the work they do in the UK and on which they pay the appropriate rate of income tax.

Lenders might be forgiven, therefore, for trying to pigeon hole seafarers or other offshore employees into a self-employed mortgage application. That attempt is then likely to be thwarted by unnecessary obstacles and questions when they see that your income is tax exempt because you qualify for seafarers’ earnings deductions.

If you are a UK resident, you are liable to pay UK income tax. But if you have worked outside the UK for longer than a usual minimum of 365 days you may qualify for seafarers’ earnings deductions from your tax liability. Despite having payslips and bank account statements, therefore, you may find it more than usually difficult furnishing the evidence of income needed to support a mortgage application.

If you work as yacht crew, your difficulties may be compounded still further by your unique financial situation – likely to provide high earnings at times, but subject to wide fluctuations in currency exchange rates. All in all, financial circumstances which are likely to make obtaining a mortgage more difficult.

Mortgages for offshore employees may prove still more difficult to obtain by those who are not UK residents, earn their income in foreign currency, pay no UK income tax, and have no credit history in the UK.

If you fall into any of these categories and are in search of seafarer mortgages, mortgages for cabin crew mortgages for yacht crew, or mortgages for offshore employees here at Needing Advice we are likely to be able to help – not only in finding the mortgage you need, but in guiding you towards some of the most suitable deals available.

How much deposit will I need for a seafarer mortgage?

Once you have persuaded a potential mortgage lender that you represent no greater risk than many another applicant, a seafarer mortgageA mortgage for a property on or near water. typically requires a deposit of at least 15% of the purchase price of the home you want to buy – although there are some providers prepared to accept deposits as low as just 5%.

As with any mortgage application, however, the larger the deposit you offer to put down, the less you need to borrow – and the greater the chances of your application succeeding.

What proof of income will the lender need to see?

Any lender mortgage lender is going to require some proof of your declared income – to comply with the Mortgage Market Review (MMR) rules enforced by the industry’s regulator, the Financial Conduct Authority (FCA).

Exactly what details are required may vary from one lender to another –

seafarers are looked at on a case by case basis as there are a lot of factors underwriters need to take into account when assessing the case – but typical examples are likely to include:

• a reference from your accountant;
• SA302s – these are the confirmation certificates of tax you have paid and issued online by HM Revenue and Customs (HMRC) if you complete a self-assessment (if you are using an accountant, ask him or her to obtain the necessary SA302s on your behalf);
• accounts, payslips and tax overviews (also available from HMRC) – preferably for the past three years; and
• if you are UK-resident, paid in sterling through a UK bank account, but your income is not taxed because of the time you spent working outside of the country, you may need evidence of this exemption or allowance from HMRC.

It is worth bearing in mind that some mortgage lenders might automatically deduct the tax they expect you to have paid when calculating your income for mortgage affordability purposes.

If that calculation results in your application being declined, you may appeal to an underwriter for reconsideration of your case based on your gross earnings.

What else may I need to be eligible to apply for a seafarer’s mortgage?

Some lenders may require that you have a permanent right to reside in the UK and you must live in the UK when not at sea.

Others may require you to provide evidence that your immediate family is going to be living full-time, as their principal place of residence, in the property you intend to buy.

As part of my proof of income, do I have to be paid in Sterling?

Your income does not need to be paid only in Sterling, since most currencies may be considered by our panel of lenders.

The only exception is if you are earning your income, or using funds to purchase property from jurisdictions subject to government embargo or those countries currently denied membership of the Financial Action Task Force (FAFT).

Next Steps

If you are a seafarer, yacht crew or other offshore employee, obtaining a mortgage is likely to prove more than usually difficult.

In many instances, you may be considered a greater mortgage risk to lenders – not least because your tax returns may be complicated by your qualification for seafarers’ earnings deductions, the fluctuating nature of your income or the fact that you have no liability for the payment of UK income tax.

Here at NeedingAdvice.co.uk Ltd we may help you overcome any such difficulties by identifying likely lenders offering some of the most competitive mortgage rates.

FAQs on Mortgages for Seafarers

Why is it difficult for a professional seafarer to secure a residential mortgage?

Seafarers often face challenges in securing a mortgage due to their unique financial position. Lenders find it difficult to assess their creditworthiness because they are paid in foreign currency and spend long periods of time away from home. This makes the mortgage application process more complex for seafarers.

What types of mortgage products are available for seafarers?

There are several types of mortgage options for seafarers, including standard mortgages, specialised seafarer mortgages, and government assistance schemes. A mortgage broker can help you find a suitable mortgage product tailored to your needs.

What proof of income is required for a mortgage application by a seafarer?

Mortgage lenders typically require various documents to prove your income. These can include SA302s, payslips, and bank statementsA record of a borrower's financial transactions often requir... showing foreign earnings. The requirements can vary from lender to lender, and it’s advisable to consult a mortgage broker for specific guidance.

How does a foreign currency salary impact a seafarer’s mortgage application?

Earning in foreign currency can complicate the mortgage application process due to fluctuations in exchange rates. Lenders may use exchange rate calculations to determine your income, which could affect your monthly mortgage payment and overall mortgage deal.

Can offshore workers who are not UK residents apply for a mortgage in the UK?

Mortgages for offshore workers who are not UK residents can be particularly challenging. They may lack a UK credit score and have no UK bank statements, making it difficult to find a lending facility with an appetite for lending to such applicants. However, expatriate mortgages and non-expatriate UK mortgages are options that could be explored.