Getting a Mortgage if You’re a Visa Holder

Foreign nationals can get a mortgage in the UK even if they don’t have indefinite leave to remain. But it can be difficult to get your application accepted if you don’t choose the right lender to approach. There could also be fewer options when it comes to interest rates and other terms.

This guide will give you a full understanding of how to get a mortgage for the type of visa you have, what lenders requirements are and who to ask for further guidance.

Can you get a UK mortgage without indefinite leave to remain?

Yes, it’s possible. It’s a common misconception that visa holders will struggle to get a mortgage in the UK. And while it might prove a little trickier, lenders still assess all applications by looking at the usual factors such as the size of your deposit, creditworthiness and affordability criteria.

If you’re applying for a mortgage with a visa, lenders will look for a number of other things beyond their usual eligibility requirements, such as:

Residency

Lenders want you to have lived and worked in the UK for anywhere from 12 months to 3 years. This means you’ll hold a credible record of employment, have an address history, and you’ll have built up a credit rating for them to check.

Time left on visa

Mortgage providers want you to have a reasonable time left on your visa. Again, this can be anything from 12 months to 3 years, depending on the specific lender.

Deposit

If you’re a foreign national, most lenders will see you as a higher risk. As a result, it’s likely you’ll be asked for a higher deposit. A lower overall loan-to-value will give a lender more confidence you can afford your monthly mortgage repayments.

Depending on the lender, the maximum LTV could be around 75% (meaning you’ll need a 25% deposit), but some will go up to 80%.

No two mortgage applications are ever the same. If you’re a foreign national, there will be other eligibility criteria a lender will need to review. This will predominantly centre around the type of visa you currently hold.

Types of visa accepted for a mortgage

Lenders appear most comfortable offering mortgages for longer term work visas where your income is required to support the loan. These include:

• Tier 1: Entrepreneurship visa, for people who want to come to the UK to start a new business, join an existing one, or invest funds into one.
• Tier 2: For people who have been offered a job in the UK and are being sponsored by their employer.
• Spousal: For people married to UK residents.
• Ancestral: For Commonwealth citizens who can prove one or more of their grandparents was born in the UK.

If you’re in the UK on another type of visa, like a student visa or tier 5 visa don’t panic – these are just the most commonly accepted. You may still be able to apply for a mortgage.

How to get a mortgage on a UK visa

Here are the steps to follow

Step 1: Gather your documentation

You’ll need to have the following:

• Proof of ID and residency
  This can be proven using your passport and residency card or visa.
• Proof of name and address
  You can use recent bank statements including your name and address, utility bills from the last three months, or a year’s worth of council tax statements.
• Proof of income
  If you’re employed, you will need to show payslips from the last three months. If you’re self-employed, you may have to show up to three years of tax returns
• Proof of outgoings
  Evidence of your monthly spending and other debt, which can include credit cards, personal loans and student loans.

Step 2: Check you meet the basic criteria

As we’ve mentioned above, lenders have specialist criteria when lending to foreign nationals. It’s a good idea to check whether you meet them before approaching a lender, so you can prepare for any potential problems and get specialist advice.

Step 3: Speak to a broker

Before thinking about approaching a lender directly, try a specialist broker first. They will be able to offer their advice on which lenders will look more favourably on your application and what criteria you’ll need to fulfil.

What else do lenders look for?

Some lenders will insist you have a UK bank or savings account. Many will also want you to have raised the deposit from your own means as well, rather than accepting it as a gift from a family member.

If you don’t meet these criteria perfectly, all is not lost. The specialist brokers we work with have experience arranging mortgages for foreign nationals who have only just entered the country, don’t have long left on their visas or are struggling to raise a high enough deposit.

Mortgage requirements for applicants with spousal visas

If you’re in the UK on a spousal visa, you’ll have to meet the requirements above to get a mortgage, but in addition to this, most lenders will ask for the mortgage application to be made jointly with your partner. This is actually a good thing, as you’ll be able to count both your incomes together and likely be eligible for a larger loan.

If your spouse is in the UK on a visa and this is impacting your ability to get a mortgage, this might be because of their limited right to remain. You might consider applying in just your name and leave your partner off, so long as your lender is happy to approve a single married applicant.

How affordability is assessed

Lenders will assess your affordability in the same way whether you’re in the UK on a visa or live here permanently.

They look at something called your debt to income ratio (DTI) to make sure you can meet mortgage repayments. Your DTI is worked out by adding up the proposed monthly cost of the mortgage and any other debts you have (loans and credit cards) and dividing it by your gross income. This is then multiplied by 100 to get a percentage.

Lenders like to see a DTI of 36% or below, with 30% or less going to your mortgage.

Try our debt-to-income calculator below to work out your DTI.

When it comes to how much you can borrow, most lenders will offer you up to 4.5x your annual income. Some might push it up to 5x or even 6x.

Evidence of earnings

For evidence of earnings, the type of income – and how you declare your earnings – can make a difference to how a lender will assess your application.

If you’re an employee, you’ll need to show the previous three months’ worth of payslips. In addition you may also be asked to provide your latest P60 tax statement, letter from your employer and/or your employment contract.

If you’re working in the UK on a self-employed basis, the process can be a little more difficult, depending on how long this has been the case. Most lenders will want to see at least 2-3 years worth of certified accounts, although some may accept 1-2 years.

Get matched with a broker who specialises in mortgages for foreign nationals

While we’ve summarised many of the things lenders want from you if you have a visa and want a mortgage, many will assess your application on a case by case basis.

Our advisor matching service will pair you with a broker who has specialist expertise helping foreign nationals get the right mortgage. Many ordinary brokers just don’t have this experience.

Give us a call on 0808 189 0463 or get in touch, we’ll arrange for an expert to contact you straight away.