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Author: Elliott Culley - Director & Mortgage Adviser of Switch Mortgage Finance
Pre Settled Status Mortgage UK
Buying your first property as a pre settled individual does not need to be hard. It is easier than you might think to buy a house in the UK with a pre settled status mortgage.
You may have approached some high street lenders and found them difficult to deal with and not very sympathetic to your situation.
Many mortgage lenders will allow you to have a mortgage when you have pre settled status. However some lenders have stricter criteria than others, so finding the lender that fits your personal situation is crucial.
You need to save time and by working with a mortgage broker experienced in getting mortgages for people with pre settled status you will make sure you are in the right hands.
What is Pre Settled Status?
Pre Settled status is granted under the EU Settlement Scheme. It gives EU citizens the right to live and work in the UK so long as they started living in the UK before the 1st of January 2021 (and applied for the scheme). It can lead to settled status and indefinite leave to remain.
Can I get a Mortgage With Pre Settled Status in the UK?
Yes mortgage lenders are happy to lend to people with pre settled status and some will treat you the same as a british citizen or the same as if you had settled status.
You need to make sure you approach the right lender to fit your situation, because some do not lend to you unless you have indefinite leave to remain. Some lenders will have stricter criteria, such as wanting a higher deposit or wanting you to have lived in the UK for more than 3 years.
Is it Hard to Get a Mortgage With Pre Settled Status?
No it is not hard to obtain a mortgage if you have pre settled status. In fact it may be easier than you think. The main challenges you will or may have already encountered surround the time you have lived in the UK and the size of your deposit.
Some mortgage lenders see pre settled applicants as more risky and therefore place restrictions on lending. You may find some lenders ask for a higher deposit, or want to see a longer history of living in the UK.
However some mortgage lenders will treat you the same as somebody with settled status or indefinite leave to remain. This mean fewer restrictions, so these are the lenders you want to target.
How Long do you Have to Live in UK to get a Mortgage With Pre Settled Status?
Firstly you need to have been living in the UK since before 2021 to qualify for pre settled status.
You will find some lenders require 3 years of UK address history.
However, if you currently have lived in the UK for less than 3 years there are many lenders that can help. Some mortgage lenders will treat you as if you had settled status and do not require 3 years address history in the UK.
How Much Deposit Do I need for a Pre Settled Status Mortgage?
It’s possible to get a mortgage with pre settled status with just a 5% deposit.
You may have approached some high street lenders who have told you they require a 25% deposit. Don’t let this put you off, although the majority of lenders do require a 25% deposit, there are some that can accept as little as 5%. In fact we have helped many clients purchase their first house with as little as 5-10% deposit.
However please consider the more deposit you have the more lenders you will have available. A higher depsoit will also mean a lower interest rate.
If you are thinking of purchasing a new build flat or house, you will need a higher deposit of at least 10-15% depending on the lender.
By working with a mortgage broker experienced in this type of mortgage you will avoid wasted time, money, and disappointment.
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.
First Time Buyer Pre Settled Status
There are mortgage lenders willing to lend to first time buyers with pre settled status. You need to approach the right lender for your circumstances. It depends on how long you havve lived in the UK and the percentage of deposit you have. However it is 100% possible to buy a house with pre settled status.
Should I Wait Until I Have Settled Status or Have Indefinite Leave to Remain?
There is no real benefit to waiting. With pre settled status you can have access to the best rates on the market, with some lenders that will already consider you as settled status.
Are Interest Rates Higher for People With Pre Settled Status?
No, the best rates on the market are available to you as a pre settled individual. Even with a smaller deposit, there are some of the biggest lenders available to you, offering the cheapest rates on the market.
How Much Can You Borrow for a Pre Settled Status Mortgage in the UK?
Mortgage lenders apply an income multiple to your annual salary when working out how much you can borrow. It is the same calculation for British citizens or somebody with settled status.
The usual starting point for lenders is 4.49x your annual income.
The figure reduces if you have any debts such as credit cards, loans or car finance. Children or other dependents can also reduce this.
Some lenders will consider lending on a higher multiple, if you have a high income, or a larger deposit. In some circumstances, it can be possible to borrow up to 5x your income.
What Documents are Needed to get a Mortgage With Pre Settled Status?
To get a mortgage with a pre settled status you’ll need the following standard documents:
- Proof of your income – Typically 3 months worth of payslips, more if you have overtime, bonus or commission-based work
- Bank statements for the last 3 months
- Proof of your deposit
- Credit Report
- Your share code to proof your pre settled status
What If Only One of Us Has Pre Settled Status?
If you are applying as a couple and one of you has pre settled status and the other has settled status, or indefinite leave to remain as a British Citizen, this will make things easier, however it is not necessary as the same rates are available despite your pre settled status.
Can I Purchase a Buy to Let Mortgage with Pre Settled Status?
Yes it is certainly possible to buy a property using a buy to let mortgage whilst on pre settled status. If you are a first time buyer or this is your first time being a landlord, there are some lenders that will not be available. However there are plenty of lenders that can consider your application and at competitive rates.
Buy to let mortgages have restrictions on the deposit and you will need at least a 25% deposit for this type of mortgage.
Can I Get a Mortgage With Bad Credit?
Yes it is possible to get a mortgage even with bad credit. It would completely depend on the severity of the bad credit, and your current position. It is always worth enquiring to see what your options are.
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