Getting a mortgage isn’t easy, for anyone. Since the 2008 financial crisis, banks and lenders have become increasingly strict in the requirements for such large levels of lending. This is a good thing, of course, but does leave forex traders in a tricky predicament. Is it even possible for forex traders to get approved for a mortgage? Let’s find out now…
Forex traders are able to get a mortgage but it won’t be easy. Lenders that are willing to take the risk on you will typically need a larger deposit, years of bank statements and trading statements. Most traders aren’t profitable in a 10 year time span, so it’s a large risk for you and the bank.
Is It Possible For Forex Traders To Get A Mortgage?
Forex traders don’t have it easy, that’s for sure. We all know the struggle of trying to get a mortgage. Even with a decent salary, years of bank statements and a decent sized deposit, it’s still a lucky dip as to whether or not you get approved by a lender.
This is even harder for forex traders. With such inconsistent profits, mortgage brokers and lenders aren’t really a fan of forex as a primary source of income. In fact, there is a very low chance of you being approved for a mortgage if this is your primary source of income.
But it isn’t impossible. Mortgage brokers have been known to get their clients approved with exotic sources of income, all they need is proof that it’s possible and some reassurance from yourself that you’re going to try your best to get it.
So can forex traders get a mortgage? The simple answer is yes, you can apply and do your best to convince the lender that you’ll be able to get enough income in order for them to approve you.
The key here is proof. You need proof of income with consistency over time, bank statements showing withdrawals and deposits as well as proof of income source (i.e. trading statements). If you don’t have this, then the best thing you can do is to show how dedicated you are to your trading career and that you’ll be able to make it work in the long run.
It’s also worth pointing out that you don’t need to be full time as a forex trader. Many part time forex traders are making great profits – without ever having to sacrifice their main income. I’d highly recommend reconsidering if you’re looking to be a full time trader as it’s really not the dream that most investors think it is.
What Factors Need To Be Considered For A Forex Trader To Get A Mortgage?
It’s not as simple as just getting a mortgage from a bank or lender. There are a lot of factors that you need to consider…
- Credit history. Your credit score and history are extremely important factors when lenders are considering giving you a large sum of capital. There are various tools you can use to check your credit score.
- Length of trading career. If you’ve been trading for 12 months, your chances of being proved by a lender aren’t great. If you’ve had 4 years in the industry, you may stand a good chance.
- Success of trading career. If you’ve made £1000 trading in the past 3 years, you aren’t going to get a mortgage. If you’ve made £200,000 – the odds are in your favour!
- Assets and liquid cash. You’re going to need a sizeable deposit for a mortgage. I’d assume that most lenders are going to want to see a larger than usual deposit size, due to your chosen career as a forex trader.
- Credit agreements and debt. When it comes to mortgages, the less credit agreements you currently have, the better.
Is It Worth Getting A Mortgage As A Full Time Forex Trader?
Forex trading is stressful at the best of times, without having to worry about making mortgage payments every month. In fact, the whole point of forex trading is to get out of debt and have your money work for you.
It’s also worth noting that mortgages aren’t free. You’ll need to pay a fee for borrowing the capital – which in this case is likely going to be a percentage of the overall loan amount (i.e 5% – 30% of the total loan amount).
Really, it’s not something I’d recommend for a full time trader. Instead, consider your options and try to get into an industry that is more stable when it comes to capital and income.
Returns aren’t constant, sadly. If forex trading is your primary source of income, I’d recommend trying to diversify your income sources – this way you’ll get more favourable rates from your lenders. Not only that, you’ll have less pressure on your trading.
In Summary – Can Forex Traders Get A Mortgage?
In conclusion, forex traders can certainly get a mortgage, but it’s not easy. You’ll need to provide proof of income and show that you’re dedicated to your career.
If you really do want a mortgage, consider looking for an industry which has more stable income – or aim for more diversified income. This way, if one source goes down – it’s not the end of the world!
Do you have a mortgage as a forex trader? Let me know in the comments below…