Will You Need To Prove Your Income To Apply For A Mortgage As An Expat?
There are a ton of scenarios where anyone may need to provide proof of how much they make and where it comes from. When applying for a business or personal loan, for instance, lenders may request this information so they can assess whether you will be able to repay the amount you are seeking to borrow.
The same could be required from individuals and businesses when leasing a car, renting equipment, purchasing certain assets, or when getting a mortgage.
But what if you’re an expatriate who’s looking to own property back home or in your work designation country?
Do you need to provide proof of income to apply for a mortgage? Let’s find out below!
Yes, You Need To Prove Your Income
One of the best parts about the UK and the likes of the USA is that anyone can own property regardless of whether or not they have citizenship. There are no legal restrictions. Especially if you’re still working there, you can even get approved for a mortgage as a non-citizen in case you need it.
And indeed, you will need to prove your income. Proof of income is one of the first things that mortgage lenders will ask from you before considering your mortgage application.
In addition to the expatriate category you fall in, your eligibility may also depend on your credit score as well as your employment terms. In the US, foreign workers with a work visa or green card permanent residency find it easier to get approved for a mortgage.
Ways to Prove Your Income
There are various ways to prove your income to a mortgage lender. Understanding the various options to you can help maximize the chances of getting approved, and probably get you a better deal if you provide as much accurate information as possible about your earnings.
Also, some lenders may require you to provide more than one document to not only confirm your income but also to provide an outlook on your financial commitments.
Some common ways to provide income include:
● Bank Statements
Whether you run a business or you are employed, you could use your bank statements as proof of income. They reveal incoming deposits like payment checks, payroll credits, and even debits out of your account.
● Pay Stubs
If you’re employed, a paycheck is one of the best ways to prove income. The pay slip reveals gross and net earnings, rates, payment dates, and periods, as well as any deductions made from your wages.
● Tax Documents
Tax returns documents can also be used to prove income. They typically reveal how much you make in a year, and are usually accompanied by supporting documentation.
● Employment Letter
Finally, employment contracts or verification letters usually indicate the salary earned as well as the dates and terms of employment. Many lenders will be happy to accept this as proof of income.
4 Tips for Expats When Applying for a Mortgage:
1. Make sure you have all of your financial documents in order
As discussed above, these may include your tax returns, pay stubs, bank statements, and any other financial documentation that will show lenders that you are a reliable borrower.
2. Shop around for the best mortgage rates
Especially non-citizen expats and non-residents, foreigners often have to pay higher interest rates on their mortgages. This is all the more reason to compare rates from different lenders to make sure you’re getting the best deal.
3. Get a cosigner
If you don’t have a strong credit history or income, you may need to get a co-signer on your mortgage. This is someone who agrees to make the loan payments if you can’t at some point. A co-signer can increase your chances of getting a better deal.
4. Make a large down payment
Lenders often require expats to make larger down payments than they would for domestic borrowers. It’s often because expatriates are considered higher-risk borrowers.
Like any other mortgage applicant, expats indeed need to prove income. The pointers above highlight how to go about it.