Expatriate living
Securing a UK mortgage can be difficult if you earn international income, as many lenders do not accept overseas earnings. At Nedbank Private Wealth, we offer greater flexibility than standard mortgage lenders, helping our clients to achieve their property goals through mortgage solutions with affordability assessments that incorporate international income.
What counts as international income?
International income includes a range of income types earned overseas, such as:
- Salary earned overseas through employment or self-employment
- Rental income from properties located overseas
- Income from investments held overseas
- Foreign pension income
- Income from an overseas business
If you live outside of the UK and earn income in the country you live in, your international income can be used in the affordability assessments for a mortgage used to purchase a UK property.
Can you use foreign income for a UK mortgage?
Not all lenders will accept foreign income for a UK mortgage, but Nedbank Private Wealth’s lending services are designed to support international clients with more complex income situations.
How lenders assess overseas earnings
When assessing overseas earnings, lenders who accept this type of income will review details such as the type of employment or contract, the stability of income and residency status. They will also consider the economic stability of the country that the income is earned in and whether the income will comfortably cover mortgage repayments for the UK property.
At Nedbank Private Wealth, we offer flexible lending solutions including Lombard loans, which enable investors to secure a mortgage against liquid assets such as investment portfolios.
Key challenges when applying with international income
If you are looking to secure a UK mortgage when applying with international income, one of the main challenges you will face is a limited choice of lenders who are prepared to accept international earnings.
This is because there are added complexities such as different tax systems to navigate, and currency fluctuations can make it more difficult to assess affordability. Another issue you might encounter is providing additional documentation to verify your foreign income.
With standard lenders, applicants who do not have UK credit history are often declined for mortgages or they may require a larger deposit to be paid. Our lending team at Nedbank Private Wealth has helped clients from across the world to overcome these challenges through lending products designed for the needs of individuals with international lifestyles.
Documents you will need
Lenders will usually require a more comprehensive set of documents to provide evidence of overseas income. You will generally need:
- A valid passport
- Proof of overseas address
- Visa or residency permit (if applicable)
- Copy of employment contract
- Payslips covering the last 3-6 months
- Bank statements for the previous 3-6 months
Depending on the type of income that you earn overseas, you will also need to provide evidence specific to the income, for example:
- Statements showing rental income
- Investment portfolio statements
- Foreign pension statements
- Business accounts and bank statements for any overseas businesses
You may also need to supply foreign tax assessments and proof of deposit if you are using funds for a deposit rather than securing a loan against assets.
Currency, tax and exchange rate considerations
When you are applying for a UK mortgage with international income, lenders will also consider currency, tax and exchange rates in assessments. They will look at the stability of the economy in the country that the money is earned in.
Currency fluctuations will also be reviewed, as volatile currencies are a higher risk. Some lenders may restrict lending on currencies that are more volatile or will apply a lower exchange rate than the current market rates.
Lenders will also generally assess earnings after deducting all applicable tax obligations in the jurisdictions that apply to the borrower to get a full understanding of income.
UK mortgage regulations to be aware of
The UK mortgage industry is strictly regulated and both lenders and borrowers must comply with the relevant rules. For example, lenders must assess whether borrowers can realistically afford mortgage payments, they must also complete anti-money laundering and Know Your Customer checks.
Property investors buying in the UK also have many regulations to comply with, including having the right type of mortgage, such as a buy-to-let mortgage for rented properties.
How specialist lenders and brokers can help
Securing a mortgage when you are applying with international income is a more complex process than applying with UK income, so using a specialist lender or broker will provide the expertise and guidance to identify the most suitable financing solution.
At Nedbank Private Wealth, our lending team has many years of experience in helping clients with international income to purchase UK property, whether for residential or investment purposes. We look at an applicant’s overall financial picture and not just income, meaning that many clients have the option to secure a UK mortgage against assets to provide a faster and more convenient way to finance property.
Steps to secure a mortgage with international income
If you are interested in buying a UK property through a mortgage with international income, get in touch with our lending specialists who will be able to guide you through the options available to you.
To get prepared for a mortgage application, gathering all the required documents and information we have listed in the above sections will mean there will be no unnecessary delays.
Our lending team will be able to explain in more detail which types of documents you will require depending on your specific circumstances and how your borrowing will be structured.
Once we have had an initial discussion about your property plans and financial circumstances, we will be able to provide advice on the most suitable financing solutions, and we will explain the next steps involved in the application.
Common mistakes to avoid
These are some of the common mistakes that borrowers make that can cause issues in applying for a UK mortgage with international income:
- Missing or incomplete documents
- Having unverified source of funds
- Not considering overseas tax systems and exchange rate risks
- Applying through a lender who does not have specialist experience of working with clients with international income
By choosing Nedbank Private Wealth for your borrowing needs, we can provide the specialist knowledge that is essential for securing funds for buying UK property using international earnings.
From complying with all the relevant regulations to finding the most efficient financing solution, we can help. Get in touch with our lending team to find out how we can support your UK property plans.
