A seafarer is someone who works on a ship. This includes a wide range of occupations, from deckhands and engineers to cooks and stewards. Seafarers can work on a variety of vessels, from small fishing boats to large container ships. They may travel for months at a time, visiting ports all over the world.
Seafarers play an essential role in the global economy. They transport goods and people around the world, which helps to keep businesses running and people connected. They also help to protect our oceans and environment.
Getting a mortgage as a seafarer can be challenging. Lenders may be hesitant to lend money to seafarers because of the long periods of time they spend away from home. However, there are lenders who specialize in mortgages for seafarers. These lenders understand the unique challenges that seafarers face and can offer mortgage products that are tailored to their needs.
If you are a seafarer who is interested in getting a mortgage, it is important to do your research and find a lender who understands your situation. There are a number of resources available to help seafarers get mortgages, including the International Transport Workers’ Federation (ITF) and the International Seafarers’ Welfare and Assistance Network (ISWAN).
Mortgage options available for a seafarer
A Seafarers unique working pattern does add complexity to a mortgage, but a specialist broker can help you get on the property ladder. Seafarers face difficulties due to their contracts often being on a short-term basis, paid in foreign currency and tax deductible.
There is often a misconception that as a Seafarer you do not need to file a tax return. This is not the case and even if no tax is due, a return must still be filed. More information can be found on gov.uk.
A bank will want to be able to see a tax return to see you are eligible for the Seafarers Earnings Deduction (SED). This allows you to deduct your foreign earnings from your UK taxable earnings. Banks will also want to look to through your employment history to see how long you have been working as a seafarer, as well as see your current contract and how long this in place for. By having all these documents ready you can help speed up the application process, saving you stress while you’re away at sea.
How can a specialist broker help?
A broker will be able to investigate your situation and help you to compile the necessary documentation required. They can also maximise your borrowing on the lowest rate through their knowledge of which banks to approach regarding foreign income and seafarer’s contracts.
How do lenders view an application?
Most lenders are unable to correctly advise clients’ with more complex situations, such as seafarer mortgages. Where a tax return is required a bank will typically defer to standard policy where a two year history is required. However, this does not apply to seafarer mortgages, where the only requirement is one tax return that evidences Seafarer Earning Deductions (SED) applies.
The year does not have to be complete either. You can be a seafarer for the final day of a tax year and still evidence eligibility. More information on the SED can be found at gov.uk
If you are paid in a foreign currency, with US dollar being the most typical, then a lender will typically take the mid-market conversion rate at the point of application. The current conversion rate can found on xe.com: www.xe.com/currencyconverter/ Some lenders will then look to take a haircut of up to 25% to allow for foreign currency fluctuations.
Even though a seafarer is not paying tax in the UK, their income is still assessed as if UK tax is due. This is because if there was a change in role or days spent in the UK, the net income received would change considerably. This ensures the lender is adhering to responsible lending practices.
Contact us today to learn more about how we can help you get the best mortgage deal.