Seafarer Mortgage Advice

Can seafarers get a mortgage? How does the process work?

Seafarers can get a mortgage. It’s a little bit more complicated than for someone in a standard role, and so it’s trickier to navigate. But if you are a seafarer, as long as you can show your income and contract of employment, and that you declare your income to HMRC it’s perfectly feasible to secure a mortgage.

The important part of this is that although we can discuss your options and circumstances whilst you’re away working, once you are ready to submit a mortgage application, you need to be in the UK.

What mortgage products are available to seafarers? So any differences here?

In essence, there’s no difference in the mortgage products that will be available to you as a seafarer. You can get any type of mortgage: whether that’s a residential mortgage or if you’re thinking about buying a Buy to Let.

Something to consider is that not many lenders lend to seafarers if you’re paid in a foreign currency. Clients we deal with are usually seafarers paid in pounds, euros or dollars. If you are paid in foreign currency, we need to work with lenders that accept that specific option.

We also need to look at how you’re paid and the frequency. We’ll come on to that in more detail shortly. Also, lenders want to see how often you’re at home versus at sea as well, which they’ll consider at the same time.

What type of property can I get as a seafarer?

You can buy any property you want, as long as you can get a mortgage for it and have the deposit. Lenders will look to see how often you’re at home. For example, if you’re on a contract working nine consecutive months out at sea, lenders may ask to understand why you’re buying a property as a home if you’re away so much. They will want to know what you intend to do with the property whilst you’re at sea.

That may be okay if you have a family who will live there, but they may look at it differently if it’s just yourself. They will ask if you’re considering renting it out – in which case you should consider a Buy to Let mortgage instead.

How does the time spent at sea affect getting a mortgage?

If you’re at sea for more than six months in a 12 month window, potentially you may qualify for the ‘seafarers earning deduction’. You should speak to a tax specialist to understand your exact position.

Essentially, if you’re at sea for six months per year, you don’t necessarily need to pay tax on the income you earn whilst you’re at sea. There’s a benefit there which could increase your net income.

The other thing to consider is that if you do spend more than six months at sea each year, you may have to pay additional stamp duty for non-UK residents. Your conveyancer or solicitor will clarify your exact stamp duty position when completing on your property.

You do have to make sure you’re declaring your earnings to HMRC, whether that’s via self-assessment or an accountant. It’s fairly straightforward, and helps strengthen your application to a mortgage lender. Declaring your non-taxed income to HMRC helps to validate the source of the income, as well.

Is it easier to get a mortgage as a seafarer with a partner?

It can be, in terms of how much you can borrow. If you’re with a partner and you combine your incomes, you may be able to borrow a little bit more and get the property you really want.

There’s no real difference in getting a property with your partner whether you work at sea or not. The only thing to consider is that some lenders who lend on foreign currency may not consider a mixed currency income.

For example, if you earn in euros and your partner earns in UK sterling, some lenders might not accept that – it’s too complicated for them to deal with. In that case we need to go with a different lender who will look at mixed currency income.

How much deposit will I need and how much can I borrow?

Again, there’s no difference for a seafarer, so you could potentially purchase property with up to 5% deposit. But the bigger your deposit, the better deal you’re likely to get, and the lower the interest rate – as you’ll have more equity in your home.

As with any application, how much you can borrow depends on your income. It’s worth noting that some lenders who do accept foreign currency income will factor in assumptions for currency fluctuations. They may take a percentage off your income to allow for the fact that you’re paid in euros or dollars, which means that you might not be able to borrow as much as if you were paid in UK sterling.

How do I prove my income as a seafarer, and how is affordability calculated?

Proving your income is really important as a seafarer, so it’s really crucial to keep hold of your documents.

Your contract of employment will explain whether you’re paid at a daily rate, or via a salary, so it’s really important to keep hold of it. Some seafarers have to sign a new contract whenever they change yachts or ships, in which case you should keep a historical record of your movements between boats. It will help validate your income.

Most seafarers are employed by a company based in one of the big shipping ports like Guernsey, the Isle of Man or even the Caribbean. We’ve dealt with a few there.

Again, how you’re paid varies depending on where the company is registered. If you don’t get pay slips, a pay advice slip or statement of payments from your employer shows what you’re receiving from your employer. We then reconcile that with what’s coming into your bank account.

Finally, the other important thing to do is make sure you’re declaring your income to HMRC. You can do that via self-assessment yourself, or you can use an accountant to do that for you.

That will help validate your income and show lenders that you’re declaring all the income you’re receiving in the right way.

Are there any government schemes to help seafarers?

I mentioned this a little earlier – that depending on how long you’re at sea in a 12 month window, you may qualify for the Seafarers’ Earnings Deduction, which essentially means that if you’re away at sea for 183 days or more in that 12 months, you may not have to pay tax on that income you’ve earned.

You may still have to pay tax on other income you get from the UK. For example, if you already have a Buy to Let, for example, that would still need to be declared in the normal way and you may have to pay tax on that. But you may not have to pay tax on the income you earn from your employment at sea.

Other schemes are all open to seafarers, so you can still open a Lifetime ISA to help you build up a deposit a little bit quicker. You still qualify for shared ownership properties if you can find one to buy, and all the other schemes around new builds should be open to you as well.

There are no limitations on what’s available for seafarers, but there is some extra benefit as well.

How can a mortgage broker help a seafarer get a mortgage?

As a seafarer, it can be more complicated to secure a mortgage. It’s all about finding the right lender to fit your circumstances. We have a lot of experience looking after seafarers, from yacht captains to marine engineers, stewardesses and chefs.

We’ve dealt with the whole crew, essentially. We can help take the complications away and make it a much smoother process for you. We can let you know what to think about in preparing yourself to secure a mortgage as a seafarer, and what to consider as well.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

MOST BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.