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Author: Elliott Culley - Director & Mortgage Adviser of Switch Mortgage Finance
Tier 2 Visa Mortgage
Getting a mortgage on a tier 2 visa can be difficult, but it is certainly possible to obtain a mortgage if you are in this scenario. Mortgage lenders in the UK often apply extra rules and restrictions on people buying a house with tier 2 visas and some lenders don’t lend at all. However there are many lenders available and with some you can even obtain a mortgage with a 5 or 10% deposit.What is a tier 2 visa?
A tier 2 visa more commonly now known as a skilled worker visa allows you to come and stay in the UK to do an eligible job with an approved employer. Usually the tier 2 visa will be valid for 5 years, which at that point you can look to extend or apply to permanently reside.Can a tier 2 visa holder buy property in the UK?
Yes as a tier 2 visa holder you can purchase property in the UK. There are now restrictions however if you are buying with a mortgage, there are only a few mortgage lenders that will consider you so you need to ensure you approach the right lender first time around.Can I get a mortgage on a tier 2 visa?
Yes it is certainly possible to get a mortgage on a tier 2 visa. You may have found that most mortgage lenders ask for large deposits, long period of validity left on your visa or want you to have lived in the UK for a certain amount of time. As a result it can seem like getting a mortgage on a tier 2 visa can be really difficult.
In reality, there are lenders offering mortgages to you even if you only have a 10% deposit. You will find many mortgage lenders available provided you have lived in the UK for the last 12 months, and there are lenders that will consider you even with less than 6 months left on your Visa.
Is it difficult to obtain a mortgage with a tier 2 visa?
When you first start looking it can seem like obtaining a mortgage is going to be really hard. In reality it can be easier than you might think to get a mortgage on a tier 2 visa. The biggest obstacles you may have come up against is the size of the deposit needed and how long you have left on your visa.
There are visa friendly lenders that will be able to help you get past these difficulties. You need to make sure you apply with the right lenders, this is where an experienced mortgage broker can help you.
Buying a house in the UK with a tier 2 visa
Many tier 2 visa holders think it is very difficult to buy a house in the UK. Although it can be more challenging, it is certainly easier than some people believe it to be. You need to apply with the right lender for your circumstances and there are a few lenders with flexible criteria to help tier 2 visa holders as much as possible.
Tier 2 visa mortgage deposit
The biggest challenge we come across for foreign nationals is the deposit. Lots of lenders will restrict you to needing a 25% deposit. However it is possible to obtain a mortgage on a tier 2 visa with just 5% deposit. To be eligible you will need to fit one of the following criteria:
5% Deposit Criteria
Qualifying with a 5% depsoit can be difficult if you are currently on a skilled worker visa. However it is possible provided you fit the below criteria.
Apply with somebody who has indefinite leave to remain or;
You have lived in the UK for the last 5 years or;
On a sole application you earn £75,000+ or on a joint application your have a combined total income of at least £100,000 per year.
We also now have access to a new mortgage lender that not all other mortgage brokers will have access too. They require the tier 2 visa holder to earn at least £50,000 per year and have lived in the UK for 18 months.
10% Deposit Criteria
It is much easier to qualify for a tier 2 visa mortgage with a 10% deposit. You could even qualify for a tier 2 visa mortgage with less than 1 years UK residency.
To qualify for this you will need to either be earning £65,000 per year with at least 2 years remaining on your VISA or there is one lender that has no minimum income requirements, but you do need to pass their credit score requirements.
This lender currently has access to overseas credit data from Australia, Austria, Canada, Dominican Republic, Phillipines, Germany, India, Kenya, Mexico, South Korea, Spain, Switzerland and the USA. Applicants who have recently resided in one of these countries will have a stronger chance of passing the credit score, however if you resided in a different country you can still pass.
The longer you live in the UK the more lenders will become available to you. At two years you will have access to quite a few lenders, but it is certainly possible with less than 2 years and we have helped many clients in this situation.
Most other lenders will restrict you to needing a 25% deposit. However there are some that are slightly higher only needing a 15-20% deposit.
Real Case Scenario
A client came to us for help after they had been turned down for a mortgage through HSBC. Our client was on a working tier 2 visa and had been in the UK for 18 months. They had a 10% deposit, but had been rejected by HSBC as HSBC required a larger deposit of 25%. We were able to secure the client a mortgage with a high street bank the same week, using a 10% deposit, and the client was able to proceed with the purchase of their first home in the UK.
Speak to an Expert!
Contact us today for expert advice and guidance on your unique mortgage and property needs. We will work with you on a one-on-one to basis to help you find the right solution for your needs.
With our experience you can rest assured that you are in good hands when it comes to securing the financing you need for your property.
Do I need a high credit score to get a tier 2 visa mortgage?
There is only 1 lender that does not credit score you as part of their application. All other tier 2 mortgage lenders will credit score you as part of the application.
As you are borrowing a high percentage of the property most lenders will want to see a high credit score and to see a history of responsible lending. Some tier 2 visa holders do not pass the credit score with the lenders, because their scores are too low. This can be because you have only just moved to the UK and your credit score hasn’t had time to improve, or you haven’t taken out credit in the UK previously.
Below are some tips on how to grow your credit score as well as a link to Check my file, which recommend as it gives you a good understanding of your credit profile.
What is my current credit score?
I have lived in the UK for less than a year can I get a mortgage?
Yes there are a few lenders that can now consider this. Even with a 10% deposit. You will need to pass the credit score and with some lenders have minimmum income requirements of £60,000 per year. However there is no one lender that can consider this with no minimum income, provided you have 10% deposit.
Real Case Scenario
A client came to us having been in the UK for only 4 months. We were able to secure the client an accepted decision in principle within 2 days. The client eventually found a property and the mortgage was secured a couple of weeks later.
*The above scenario is possible if you have a 25% deposit or earn over £60,000.00 with at least a 10% deposit.
Why do most lenders want large deposits for foreign nationals?
A mortgage where an applicant is on a VISA and does not have indefinite right to remain carries more risk for a mortgage lender. The lender’s priority is ensuring that they can sell the property if you fail to keep up with the mortgage payment.
If you do not yet have indefinite leave to remain, there is a risk you may need to leave the UK in the future. If that’s the case it may become difficult for the partner on the mortgage to maintain payments on the mortgage or the lender to communicate with you.
Therefore lenders ask for higher deposit levels to compensate for and ensure you will not fall into negative equity if you had to sell.
How long do I need remaining on my Tier 2 visa to get a mortgage?
It is possible to obtain a mortgage with less than 3 months remaining on your tier 2 VISA. Some lenders ask for at least 2 years so you may need to avoid these lenders. If you have reapplied for an extension some lenders may ask to see this. The longer you have left the more options you will have.
How long do I need to have lived in the UK to get a tier 2 visa mortgage?
For most lenders you need to have lived in the UK for a minimum of a year. This is so you can build up enough credit history in the UK. I was able to secure a mortgage for one client who had less than 3 months in the UK, so it is possible to get a mortgage with with less than a year.
You may have found some lenders have asked you for a three year history of living in the UK. There are many that ask for less than this, offering competitive rates, but the longer you have lived in the UK the more options you will have.
How much can we borrow for a mortgage with a tier 2 visa?
Most mortgage lenders will use 4.49x your annual gross salary as a starting point. The total borrowing figure will reduce if you have credit commitments like a car loan or credit card. The figure could also reduce depending on how many children you have or adult dependents that may live with you.
Are interest rates higher for Tier 2 visa mortgages?
You will be offered the same interest rate as anybody else applying for the same product with the same lender. However you might be restricted on who you can apply to depending on your personal circumstances, so you might find the rate you can obtain might be higher than a UK national as you might be restricted to who you can apply too. Generally speaking it is possible to obtain the best interest rates on the market.
Does one of us need to be a UK citizen to get a mortgage?
If neither of you have indefinite leave to remain you can still get a mortgage, even with a small deposit. Please refer to the earlier criteria.
However if you can apply with someone who has indefinite leave to remain in the UK it increases the availability of lenders and makes a mortgage with a lower deposit much easier to obtain.
Indefinite leave to remain includes:
British citizen, OR
Has already been granted indefinite leave to remain, OR
Has EU settled status, OR
How long do you need to live in the UK to get a mortgage?
The mortgage lenders will require you to have lived in the UK to obtain a mortgage with them. You’ll have the best chance of qualifying with the most tier 2 visa-friendly mortgage lenders once you have been in the UK for 12 months, but if you are applying with someone with indefinite leave to remain, this can be lower.
What documents are needed to get a mortgage on a tier 2 visa?
The below is a list of the most common documents a lender may ask for, although further documentation could be required:
Proof of your income
Bank statements for the last 3 months
Proof of your deposit
Credit report
A copy of your visa, OR
A copy of your UK Immigration share code from this government service
Can I get a Mortgage on a Tier 2 Visa as a first time buyer?
Lenders will consider you if you are a first time buyer. If you have owned property abroad this can affect your stamp duty liability and if you still own the property, the running cost must also be taken into account.
Can I get a buy to let mortgage on a tier 2 visa?
Yes it is certainly possible to obtain a buy to let mortgage. Some mortgage lenders do have a minimum income of £25,000 per year that you will need to earn, but some require no minimum income at all.
If this is your first time being a landlord or you are first time buyer, then there are some lenders that will not consider you, and you will want to make sure you apply to the correct lender by using a mortgage broker.
Can I get a tier 2 visa mortgage with bad credit?
Yes, it is possible to get a mortgage with a tier 2 visa even with bad credit. It would completely depend on the severity of the bad credit. There are some specialist lenders that will consider you, however you will need it likely you will need to provide a larger deposit and resided in the country for longer.
If you are not sure on your credit situation and whether it could affect your mortgage chances, then we would advise to get in contact with us.
Why Choose Switch to Help You?
Whether purchasing or remortgaging, you’ll want access to the best products on the market. We have a proven track record of helping clients with tier 2 visas and will be able to assist you with your mortgage needs.
Why Switch Mortgage Finance
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