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Can a foreign national get a mortgage on a visa?

A simple and (nearly) definitive guide to whether foreign nationals from outside the EU can get a mortgage.

One of our main areas of business is foreign nationals on visa’s, and it’s interesting to see how many people are asking on forums on other websites whether it’s possible for them to get a mortgage and how much misinformation is spread around.

So let’s dispel some myths first. Getting a mortgage on a visa isn’t difficult in per se. The vast majority of lenders however will not lend at all on these cases.

So it’s very difficult for a member of the general public to try and find the right lenders and at the same time make sure that all other requirements are met too.

That’s why you see so many people on forums trying a lender recommended by someone else but then being told they cannot apply.

The benefit of an advisor like ourselves is knowing which lenders we can ignore altogether (and dealing with these applications frequently enough to know if they have recently changed their rules).

And at the same time knowing enough about all of the other eligibility rules to quickly and easily determine whether you will be able to get a loan.

It’s not something where the lender makes a case by case decision (in general), for most applicants if they meet the guidelines below then they will be accepted subject to credit scoring and all other rules.

We normally offer a fee free service, so there’s very little to gain in trying to DIY an application (whether you’re on a visa or not).

So the point of this post is to give you a simple answer as to whether we have lenders who can consider your application and visa status.

It’s also very difficult to be definite because this post basically compresses the true bulk of the different lenders eligibility rules to try and make things simple.

So if you don’t meet the rules below feel free to ask us about your situation and we will be happy to go into more detail.

So then, can we get you a mortgage?

 

Applicants who have lived in the UK for more than 2 years

If you have resided in the UK permanently for 2 years or more, and have a 10% deposit we have lenders available.

This is regardless of the type of visa (except refugees; see below).

It obviously still depends on how well you credit score, and other factors like having suitable income etc.

It’s possible to get a mortgage up to 95% if you have been employed/self-employed continuously for 3 years or more.

In this instance continuously employed could mean working part time whilst studying for example, as long as you have been working for someone without a break of more than a few weeks between any 2 roles.

Or if you have more than 30 months remaining on your visa then again it’s possible to go up to 95% and this is also generally straightforward.

If you have a tier 2 visa then a letter from your employer confirming their intention to renew your work permit is also suitable with less than 30 months remaining.

For joint applications only the applicant who has a sponsored work permit would need the employers letter.

Bear in mind though that the visa is only one element of the application. Meeting the criteria for an applicant on a visa doesn’t mean you meet the rest.

That’s why one of our roles as your advisor is to make sure that you meet all the criteria required before application.

 

Applicants who have lived in the UK for less than 2 years

If you have resided here for less than 6 months, it’s very unlikely that you will have sufficient credit score to get a mortgage (but there can be exceptions, especially if you have UK bank or credit accounts with longer term history).

So in most cases you will need to have been residing here for 12 months, it is technically possible in the first 12 months but will be very case by case dependent.

With less than 2 years UK residency, mortgages are still readily available up to 95% of the purchase price if you have more than 30 months on your visa.

For those on a tier 2 visa with less than 30 months remaining if your employer can confirm that they will look to extend your visa then again 95% is still possible.

Applicants on a tier one visa can apply up to 90% once they have resided in the UK and been employed for more than 6 months regardless of the remaining term on the visa.

If you have 25% or more deposit, then mortgages are available regardless of how long remains on your visa or how long you have actually resided here.

But for anyone with less than 12 month’s residency credit scoring will be a major factor so the shorter the UK residency history the less likely it is possible.

If you don’t have 25% deposit, have been here less than 2 years, and have less than 30 months remaining on your visa, and a visa such as an ancestry or spousal visa then it could be possible to buy a new build property under the help to buy shared equity scheme.

 

Very large deposits

If you have more than 30% deposit available, then describing a conclusive answer would be too complicated as there are far more potential lenders.

So if this applies to you but you don’t meet the criteria above give us a call to discuss it.

 

Self employed

We don’t see a lot of self-employed applicants on visa’s however this does not exclude you from application.

But being self-employed has its own criteria with each lender which is probably far more complicated so really you would need to get in touch with us to discuss this in more detail!

 

Refugees

Refugees are the main exception to the rules above. Most lenders won’t accept applications from refugees until permanent right to reside is granted.

If you have a deposit of 25% or more there may be options available though, once you have 12 month’s residency in the UK.

 

EU Nationals

EU Nationals still currently have full legal right to reside in the UK and so most lenders can accept your application.

However the length of residency is the main factor so if you have been in the UK for less than 3 years you may well still benefit from our assistance.

 

In summary

So then as you can see here, there are plenty of options available to meet most circumstances.

These are all standard products from high street banks. You won’t get a higher rate because of your nationality.

Every case is different which is why we cannot give you a completely definitive answer (it’s also ludicrously complex to detail in a blog post).

So always seek advice from a professional like ourselves.

We also don’t treat foreign nationals as high complexity cases. We won’t charge an advice fee purely because of being on a visa.

Most of our clients receive a fee free service including foreign nationals.

Those who we do charge fees are usually borrowing smaller amounts, or have other more complex issues (like multiple forms of self-employment).

For more information or to discuss your circumstances call 08454594490 or fill in our enquiry form here.

Buying a Property at Auction & Need a Mortgage? – Read our Do’s & Dont’s for Auction Finance

Do:

Your research…

Go to at least one property auction before you intend to purchase, just to see how they work.

Go and view the property you’d like to buy, at least once.

Compare the price and condition of the property to others that are similar that have recently sold or are currently on sale in the street/area. This will help you determine what you think the true market value of the property is and how much you are prepared to bid for it. Websites like Zoopla offer lots of information on previous purchase prices and average prices in the area.

Get a survey/valuation of the property in advance of the sale if this is possible.

Get hold of the Legal Pack and get a solicitor to check it prior to the auction. This pack contains all the information that your solicitor would normally check if you were buying a property in the more conventional way and usually includes key information such as special conditions of sale, title deeds, searches, leases and any legal issues.

Take advice from a mortgage broker or adviser on the suitability of the property for raising a mortgage.

If you can get a mortgage approved on the property prior to the auction or if not get a Mortgage Decision in Principle and an application near ready to submit, before you go into the auction room as you will usually need to complete within 28 days or forfeit your deposit.

Get initial quotes for remedial work if the property needs considerable work. You might be surprised at how much these jobs will cost – better to know up front than after you’ve made your purchase.

Ensure you have sufficient funds available for costs and remedial work if considerable as your mortgage lender will very likely retain part of the mortgage amount until these works are completed.

Have your deposit ready for payment on the day – usually 10% of the hammer price.

Don’t:

Bid on a property at auction that you haven’t seen and looks to be a real bargain in the auction room – there’s probably a reason why no-one else is bidding on it.

Get carried away in the auction room – know your maximum bid before you arrive and don’t get into a bidding war that pushes you beyond this maximum – be prepared to walk away.

Presume you’ll be able to get a mortgage after the event – you may need to shop around or get independent advice. If you can’t pay the balance within 28 days of the auction you will pay hefty interest and possibly forfeit your deposit.

For mortgage advice on short term finance for property auctions visit us here rightmortgageadvice.co.uk

Mortgage Advisor Q&A: Securing a mortgage whilst on maternity leave

Is it possible to get a mortgage whilst on maternity leave?

As many couples think about moving to larger homes when their family starts to grow, it is not surprising that we are often asked if it is possible to get a mortgage when on maternity leave.

The simple answer is yes for almost all circumstances. However, there are lots of considerations and lenders do vary in the way they calculate affordability during this time.

Some lenders will use only the income during maternity leave in their affordability calculation which will often leave the maximum loan available too low.

However, other lenders will use the ‘usual’ salary or the ‘return to work’ salary in the calculation if return to work is within the next few months. If return to work is not anticipated for a longer period of time there are still one or two lenders who will consider the application under these terms.

In order to evidence this, lenders are likely to request a letter from the client confirming the ‘usual’ salary and the current income. They will also request a letter from employers to confirm the return to work date, the terms of the contract – hours and ‘return to work’ salary.

It will be important that mortgage payments can still be afforded during the maternity leave so evidence of savings to substitute the difference in income and mortgage payments will often be required for the remainder of the maternity leave.

Consideration as to future child care costs when calculating affordability should be made as well to ensure that the mortgage will be affordable long term.

To request a call back or further advice just fill in our brief enquiry form here

Woolwich have more good news for Mortgage Brokers

Woolwich have announced changes to their 4.19% fixed rate until 31/10/2011 Mortgage product at 70% Loan to value.

The product was previously restricted to a maximum borrowing of £200,000 and a minimum borrowing of £100,000. The amendments now allow maximum borrowing of £1 million and minimum borrowing of £50,000 opening the product up to a much wider audience to the delight of Mortgage Brokers and borrowers alike.

The product remains the same otherwise with a £499 arrangement fee. The APR is 2.5% and reversion rate currently 1.99%. Based on a loan of £100,000 other applicable fee’s are a valuation fee of £295, land registry fee of £200, lender Conveyancing fee of £126 and a £35 completion fee. Early repayment charges are 3% of the outstanding loan if the mortgage is repaid before 31/10/2011.

As usual consult a mortgage advisor or mortgage broker and request a Key Facts Illustration about the mortgage prior to making a decision.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. We do not usually charge a fee for mortgage advice although you do have the option to pay up to 1.5% of the loan amount. Some buy to let and commercial loans are not regulated by the Financial Services Authority.

Can I Buy without a deposit?

A big question for many first time buyers at the moment is how can I purchase a house without a deposit in the absence of 100% mortgage products.

One way that is possible is the governments Home Buy Direct shared equity scheme which allows customers to buy a house for 70% or more of its value, the developer or makes a loan for the remainder on an interest free basis which later reverts to a very low rate such as 1.75% after several years. Some of the property developers involved in the scheme are offering purchase without deposit.

The scheme operator is repaid either by staircasing (buying a larger stake in the property towards 100% ownership) or on sale of the property in which case they will take their percentage of the sale value.

Housing associations may also run similar schemes known as shared ownership where you purchase between 25-75% of a property typically and pay a nominal rent on the remainder however these may require a deposit. Broadly both schemes are quite similar.

To find out more search for Home buy Direct on Google etc or for housing associations in your area.

However one way that usually wouldn’t work is if the vendor simply strikes the deposit value off the sale price. Known as a vendors deposit this is now very unlikely to be accepted and pretty much all lenders will take the lesser figure for the valuation leaving you back at square one.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT. YOU DO NOT HAVE TO PAY A FEE FOR OUR SERVICES AS WE RECEIVE COMMISSION FROM LENDERS. SOME BUY TO LET AND COMMERCIAL LOANS ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY
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THE FINANCIAL OMBUDSMAN SERVICE (FOS) IS AN AGENCY FOR ARBITRATING ON UNRESOLVED COMPLAINTS BETWEEN REGULATED FIRMS AND THEIR CLIENTS. FULL DETAILS OF THE FOS CAN BE FOUND ON ITS WEBSITE AT WWW.FINANCIAL-OMBUDSMAN.ORG.UK

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