Mortgages for Forex, Stock and Crypto Traders

19-January-2022 14:42
in Private clients
by Sam Hodgson
How to Secure a Mortgage Using Your Trading Income

If your primary income stream is through trading – be it stocks and commodities, forex or cryptocurrencies - you’ve probably struggled to get mortgage finance at the levels that your earnings warrant.

Most banks see trading income as a red flag for a number of reasons. But are there specialist lenders out there who are comfortable with the risks, and who can see the real value in your earnings?

In this guide, we’ll look at why it’s difficult to get a mortgage as a trader, - particularly if you’re operating in the crypto sector - what finance options are still available on the market, and how you can get hold of them.

In This Guide

Is it difficult to get a mortgage as a trader?
What types of trading income can be used for your mortgage?
What kind of mortgage can I get as a forex, stock or crypto trader?
How can I improve my chances of getting a trader mortgage?

Cryptocurrency Trader Mortgages

Is it difficult to get a mortgage as a trader?

The short answer is ‘yes’.

But it’s not impossible.

High-street banks and traditional lenders view trading income as high risk, and most will reject your mortgage application on face value for two main reasons:

  • Trading profits are seen as a high risk income source

Regardless of your skills and experience as a trader, banks will always view your earnings as having the potential to be irregular and unreliable, particularly if you’re trading with volatile assets like cryptocurrencies and small companies.

You can support your application with evidence of your trading history and strategy, but most lenders will still refuse to grant you a mortgage.

  • A higher risk of money laundering

Banks and lenders can be charged significant fines if they’re found to be lending money against the profits of criminal activity, and falsified trading profits is a fairly common money-cleaning strategy.

Banks may need to take additional due diligence when verifying the legitimacy of your earnings, or they may just consider your application not worth the risk.

How to Get a Mortgage as a Trader

What types of trading income can be used for your mortgage?

Although mainstream lenders are typically slow to adapt to changing markets and cultures, specialist lenders and private banks have a greater level of agility to adjust to modern ways of working.

  • Cryptocurrency Businesses and Traders

If you have significant earnings through crypto trading and a track record of profits, there are lenders familiar with the industry who will make an effort to treat it equally to standard self employed income for your mortgage application.

We work with lenders with specialist underwriters that understand crypto as an asset and will take it into account in terms of equity, deposit or savings towards your application.

This is particularly true for holdings in stable coins pegged to a national currency - such as USDT which is linked to USD, for example - as it offsets a portion of the risk for lenders.

Lenders will also accept the gross value of your crypto assets, regardless of whether they hold a capital gains tax liability you are yet to crystalise.

Bitcoin Income Mortgages

Related: How to Get a Limited Company Buy to Let Mortgage

  • Forex and stock market traders

Whether you’re day-trading in the stock market, leveraging a large investment portfolio for dividend income, or you're an experienced forex trader, we can use your proven annual income figure towards your mortgage application.

You’ll typically need 2 years of evidence of your performance and earnings, including recent tax returns, and we will need to consolidate your application and liaise closely with the relevant lender.

Related: Complex Income Mortgages - How to Secure One

Example Trader Income Mortgage Property

What kind of mortgage can I get as a forex, stock or crypto trader?

As you’ll likely be using a specialist private bank, you’ll need to be looking at a high loan size in excess of £1.5m.

  • Deposit – you will struggle to find finance for more than 75% loan to value (LTV), and the more capital you can put down towards your mortgage the better in terms of loan size and interest rates
  • Interest Rates – you'll likely pay higher interest rates than with a typical mortgage, and you may wish to refinance at a better LTV after a few years if you’ve been able to build significant wealth
  • Loan to Income Ratio – a typical mortgage income multiplier is 4.5 times your annual income, but we work with lenders who can stretch this on a case-by-case basis for high-net-worth individuals and reach upwards of 5 times your income

How can I improve my chances of getting a mortgage as a trader?

Speak to a specialist mortgage broker.

Our advisers will obtain a comprehensive understanding of your income streams, business operations and overall wealth, and establish how much you can borrow and through what sources.

We will connect you to a lender with specialists in the relevant industry for you, many of whom don’t accept applications from clients directly and require a mortgage adviser to work alongside for all cases.

Related: Specialist Mortgage Broker - 7 Reasons Why You Should Use One

Example Large HNW Mortgage Case

Along with maintaining fluid communication with your lender throughout your application process, we will also provide a qualitative piece to the lender summarising your industry knowledge and experience.

This will include details of your route into the industry, your performance history, business operations if applicable, and any other relevant contextual information about your wealth and income that will support your application.

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