Did you know that self-employed applicants are more likely to be turned down for a mortgage than employed applicants? 

This is because lenders often view self-employed income as being more volatile and less reliable than employed income.

And when you’re also an expat, earning in a foreign currency in overseas markets that lenders are less familiar with, it can get even more difficult.

However, there are a number of lenders who specialise in mortgages for self-employed borrowers, and with the right advice, it is possible to secure a mortgage even if you are a self-employed expat.

The Client

We were approached by a client looking to purchase a new residential property with their partner.

They had been running a successful marketing company in the UK for a number of years, and had expanded their operations into America. They had created an LLC as a subsidiary of their UK company, and had been living in the US for the past two years while they established their foreign operations.

But upon contacting their UK bank for a mortgage, they’d been turned down due to their overseas income, self employed status and US residency.

So, they came to us for help.

How We Helped

There were a few other complications in that the clients already had a mortgage on a property in the US that they wanted to keep, and they also wanted to complete their move back to the UK before their first child was born, giving us a strict deadline to work to.

Looking in detail at our clients’ business accounts and property criteria, we agreed on a level of income that we could use for their application.

We needed to use undrawn profits from the UK and the US portions of the business to meet affordability requirements and obtain the mortgage the client required. And we’d need to pitch this to a specialist lender that could facilitate this complex application, and liaise with the underwriters to ensure it was understood correctly.

While we are not qualified accountants, we have extensive experience working with financial statements and company accounts. This allows us to understand complex self-employed situations and present a simplified solution to a lender’s underwriting team. For example, we can explain how a client’s foreign income can be used to meet affordability requirements, even if the client’s income fluctuates from year to year.

A small haircut of 10% was applied to the income derived from overseas in order to account for foreign currency fluctuations. However, this did not materially impact the overall affordability.

We stuck to the deadlines and ensured solicitors, underwriters, estate agents were all on the same page throughout the process and working effectively to get the transaction over the line.

Needless to say. our clients were delighted with the solution, and secured their new home in plenty of time before the arrival of their child.