Whether you are an EU or non-EU citizen, getting a mortgage as a non-UK citizen can be difficult.
This guide has everything you need to know about visa requirements for getting a mortgage in the UK including if you do or don't have indefinite leave to remain status.
What are the requirements to get a mortgage in the UK if you’re a non-UK citizen?
EU citizens:
Have a UK bank account
A permanent job in the UK
Lived in the UK for 3 years
A deposit (the size will vary but a 20%+ may be expected by some lenders)
Non-EU citizens with indefinite leave to remain:
Have a UK bank account
A permanent job in the UK
Lived in the UK for 3 years
A deposit (the size will vary but a 20%+ may be expected by some lenders)
Non-EU citizens without indefinite leave to remain
Mortgage applicants from outside the UK who do not have the right to a permanent abode will be required to hold one of the following visas:
Can I get a mortgage without indefinite leave to remain status?
Every year thousands of people without indefinite leave apply for mortgages in the UK whether that be to finance a permanent property purchase for a family home or as a buy-to-let investment.
That includes students, self-employed professionals, property investors and individuals employed in the UK.
Your own ability to get a mortgage within the British Isles will be dependant on a number of factors including the length of time left on your visa, as this can affect a bank’s appetite to lend to you.
How long do I need on my visa to apply for a mortgage in the UK?
Lenders want to feel confident that borrowers can repay their loan. If you have a minimal time left on your visa, this could affect your ability to work, earn and make your repayments.
Most lenders prefer a visa with more than 3 years, some accept 2 and a handful will consider less, though this will usually be in exceptional circumstances in which the borrower has high affordability, a traceable credit history that indicates trustworthy borrowing and a permanent or long-term source of employment.
Documentation may be required to prove your employment status, so it can be helpful to have an employment contract prepared in advance or alternatively, if you’re self-employed, a client list and contracts which indicate future work.
Can I apply for a mortgage if my type 2 visa is about to run out?
There are a selection of UK mortgage lenders that will consider mortgages for borrowers, even if their visa is due to expire soon.
Often, though certainly not always, lenders can ask for a higher deposit, to reduce their exposure to loss if you were to leave the UK and default on your agreement.
This can range between 20 to 40%, though other factors such as your income and the amount of mortgage you’re applying for will determine this.
Which mortgage lenders accept applicants without indefinite leave to remain?
Without the permanent right to abode in the UK, finding a lender who will approve the loan can be tasking, especially if you’re unsure about where to start your search.
There are a wide variety of lenders to compare and you can find many on comparison sites, though certainly not all, as many lenders stipulate that you either go direct or use a mortgage advisor to broker the arrangement on your behalf.
A mortgage advisor is arguably the most efficient way to find the best mortgage if you don’t have indefinite leave to remain in the UK.
They can quickly scour the market and use their relationships with UK lenders to negotiate a competitive agreement and check your eligibility in advance to prevent you from a possible credit rejection.
How much can I borrow on a mortgage as a non-UK citizen?
The amount of money you can borrow from a lender or bank in the UK on a mortgage depends on a number of factors like:
The type of property you’re buying
The amount of deposit you have saved up
Your annual income
The stability of your income
How long you’ve lived in the UK
Your credit history
Whether you’re a visa holder or not, leaders will assess your personal and financial circumstances in great detail to calculate how much they can lend to you and under what terms.
Income, in particular, is a key focus and most UK lenders will loan between 4 - 6.5 x an applicant’s annual income, with those proving to having good affordability and credit accessing larger loans.
Can I get a mortgage without indefinite leave to remain if I have bad credit?
Lots of people avoid applying for a mortgage if they have bad credit and although being cautious with credit applications is always advisable, misinformation or fear can result in people who would have otherwise been accepted, missing out on buying a home in the UK.
Getting a mortgage as an EU national with bad credit
The UK recognises EU credit reports and therefore EU nationals tend to have a traceable credit history which provides lenders with an overview of the applicant’s borrowing and repaying behaviour.
This can make it much easier for lenders to come to a conclusion about whether the borrower presents a low risk for defaulting.
EU nationals with bad credit will find that their choice of lenders is smaller and depending on the severity and date of the credit incident, they’ll likely be charged higher interest rates.
UK lenders each have their own rules about what they deem as bad credit, so if you’re an EU citizen hoping to buy but think your credit score is too low or that your credit report is poor, it could be worth having a broker check your eligibility.
It doesn’t affect your credit score but it could open up options that you didn’t know were available to you.
Getting a mortgage as a non-EU national with bad credit
Non-EU citizens won’t have a traceable credit history that the UK recognises but that doesn’t mean that getting a mortgage is out of the question.
Some lenders may require borrowers from outside of the EU to build a credit history within the UK for two to three years, whereas others may be more concerned with a borrower’s right to work and earn in the UK.
Every situation is different because no two people are the same, so even if you have previously had debt or have low affordability now, with the right advice, you could be on your way to a successful mortgage approval.
What’s the best way to find a mortgage without indefinite leave to remain?
Talk to a broker. The most efficient way to find a mortgage on a visa is to talk to an expert whose very job it is to find the best deal.
They know the lenders that offer lower interest rates on mortgages for foreign nationals and use their knowledge and relationships, to broker a mortgage agreement that is right for your circumstances.
The alternative would be to research the market for appropriate lenders, compare the deals and then contact each directly to find out more information. A broker alleviates this task because they do all the hard work for you, saving you time and often, money.
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