Securing a mortgage but income is paid abroad

Nic_George

Morning all,

I've been following these informative boards for awhile. We're gearing up to approach a broker regarding a mortgage as FTB'ers.

However, my husband has been employed out of an EU country for the past 18 months and is paid in a foreign currency. We still live here though, and he commutes backwards and forwards to his EU based employer.

I'm expecting that our application won't be as straightforward as most, has anyone recently been in a similar situation and able to provide any pearls of wisdom before we start our process?

Thanks in advance

foxy-stoat

Start with a whole of market broker, they will be able to advise you - do you have a good deposit saved?

Nic_George

Thank you, I'd forgotten I'd posted here.

We have a 10% deposit plus fee's. We have an AIP up to 750k and fingers crossed all goes well.

Are there any brokers who specialise in mortgages with foreign income? I've phoned a few lenders directly, but no joy as yet.

dgtazzman

Hi,

I am in exactly the same boat as you. I am Dutch, working for a Dutch company but have been living in the UK for 7 years now (I do have a Welch mother and was born in the UK, but never bothered getting a UK passport). My income is paid directly into my UK bank account and this is very important.

I had originally started an application with Nationwide, but they changed their lending criteria, so they turned me down, they no longer lend on foreign income. Same goes for the entire Lloyds Group (so also Halifax).

2 lenders I found still willing to work with me were Santander and HSBC. Santander do impose a 25% deduction on your income for affordability calculations as a safeguard for currency fluctuations, which my reduce the amount you can borrow significantly. Use a broker if you go with Santander as I got the impression you really have to sell your case to them if it's not a straightforward one.

I went with HSBC in the end, directly, no broker. They have no deductions like Santander, but use full income and I found them to be very flexible and open. I went from application to formal offer in 2,5 weeks with HSBC, which amazed me.

The only thing they do is warn you if the exchange rate has dropped by more than 20% compared to the rate when you applied and check if you are at that point you are still happy to continue repaying the mortgage, but I guess this is just to their duty of care.

Good luck !!!

Nic_George

Thank you for your comment.

Halifax were one of the banks that were prepared to offer an AIP in April, has this recently changed?

Good to know re HSBC and Santander. I called Santander directly, but the call centre said they wouldn't offer us a mortgage with foreign income. Shall look into HSBC this afternoon.

kingstreet

Since 21/03/2016 when the EMCD started, many lenders have pulled out of the market for business where the borrower is paid in non-sterling.

This is because the lender will in future have to carry out an annual review into the currency fluctuations and most wish to avoid this.

amnblog

Nic_George wrote: »

Thank you for your comment.

Halifax were one of the banks that were prepared to offer an AIP in April, has this recently changed?

Good to know re HSBC and Santander. I called Santander directly, but the call centre said they wouldn't offer us a mortgage with foreign income. Shall look into HSBC this afternoon.

The Call Centre were wrong.

Nic_George

Excuse my ignorance, but what is EMCD? I had a quick google but I'm quite sure it doesn't refer to electro magnets!

Nic_George

Annoying re Santander. Is there a particular mortgage product I should be asking for? Santander doesn't appear in our brokers list of banks.

amnblog

Nic_George wrote: »

Santander doesn't appear in our brokers list of banks.

You mean your broker does not access the whole of the market but uses a limited panel?

Contemptuous

Nic_George wrote: »

Excuse my ignorance, but what is EMCD? I had a quick google but I'm quite sure it doesn't refer to electro magnets!

European Mortgage Credit Directive.