For one, the pool of mortgage providers who are willing to consider applications when one applicant may not have indefinite rights to stay in the UK is likely to be smaller. Lender restrictions can pose additional complications for such applicants.
Fortunately, there are specialist lenders out there. This guide explains how to go about finding them, and how working with a broker can boost your chances of securing competitive interest rates and terms that work for you and your partner.
What is a spouse visa?A spouse or ‘spousal’ visa can be used by married couples, one of whom is a British national and the other is from a country outside the European Economic Area (EEA), who want to live together in the UK.
This type of visa allows the non-EEA partner to immigrate and reside in the UK with their British or ‘settled’ spouse, i.e. a person who is a permanent resident and is not restricted on how long they can stay in the UK.
A spousal visa is initially issued for 30 - 33 months (depending on whether you apply from within the UK or from overseas), and can be extended for an additional 30 months thereafter.
Provided you are still married and residing in the UK with your spouse, and meet the additional eligibility requirements, you can apply for Indefinite Leave to Remain (ILR) status after five years.
Can I get a joint UK mortgage if one applicant has a spousal visa?While it’s very possible to secure a joint mortgage if one applicant is a spouse visa holder, you will have to meet lender requirements, which vary by provider.
You will be asked the typical questions, and lender criteria may be more or less stringent depending on your visa terms and other personal circumstances. Expect to provide information on the following:
- Whether you want to purchase a residential or investment property.
- How much deposit you have.
- How much you want to borrow.
- How long you want the mortgage term to last.
- Affordability requirements, including earnings, source of income, outstanding debt and credit history.
For spousal visa applicants, mortgage providers are likely to have additional eligibility criteria, surrounding:
- The length of time you’ve resided in the UK.
- How long you intend to stay in the UK.
- The length of time remaining on your visa.
Can I get a sole applicant mortgage if my partner has a spouse visa?Many lenders can be skeptical about accepting mortgage applications from just one member of a married couple, and this also applies if one of you is living in the UK on a visa.
This is usually due to concerns surrounding affordability when you have a dependant, and complications which could arise during, worst case scenario, a potential repossession of the property when a resident doesn’t share responsibility for the mortgage.
If you’re avoiding applying for a joint mortgage because you’re worried being a visa holder will affect your chances, the likelihood is that a sole applicant mortgage will present problems of its own as each scenario involves an element of risk.
In any case, it’s worth discussing your situation with an expert to see which approach is most likely to work in your favour.
How much can I borrow with a spousal visa?Irrespective of whether or not you’re a visa holder, how much a mortgage provider is willing to let you borrow will be based on your individual lending criteria, as well as your affordability (discussed further below).
Most lenders use income multiples as a starting point on which to base lending, with the standard being between 3.5 - 4.5x your annual salary (or combined annual income for joint mortgage applicants).
For example, if you and your partner earned a combined £55,000 a year, this would mean that you may be eligible for a mortgage of between £192,500 and £247,500 respectively - provided you meet the remaining eligibility criteria.
Some lenders are more generous than others though, with some offering loans of up to 5.5 or even 6x your income. This will very much depend on your personal circumstances, but you can ask an expert if you’d like more information on lending criteria.
How much deposit is needed for a spouse visa mortgage?For standard UK mortgage applicants, the usual deposit requirements for residential mortgages in the UK is between 10 - 20% of the property’s market value.
If you’re a spouse visa holder, many lenders restrict your loan-to-value (LTV) to 70-75% (25 - 30% deposit) to balance out the perceived risk. This can, understandably, make a big difference for some applicants’ buying prospects.
While there are a handful of lenders willing to consider lower deposits they can be difficult to pinpoint, which is why an experienced mortgage advisor is best placed to help you navigate the landscape.
That being said, if you can afford to put down a larger deposit it’s advisable to do so; a wider range of providers to choose from is likely to open you up to more competitive interest rates.
Spouse visa mortgage eligibilityTo be eligible for a spouse visa in the UK, the applicant needs to meet certain eligibility criteria.These include a number of financial and personal requirements, including successful completion of a ‘genuine relationship’ test.
This is relevant to prospective mortgage holders as the strength of your application will, in part, be dependent on your ability to meet these requirements if one of you is living in the UK on a spouse visa.
Affordability requirements for spouse visa holdersWhether you’re a visa holder or not, lenders will assess affordability for your desired mortgage by reviewing your finances to determine how much of a risk you pose as a borrower.
This is determined by calculating your debt-to-income (DTI) ratio, which is the total sum of your monthly debt obligations (mortgage, outstanding loans, credit cards etc.) divided by your gross income. This is multiplied by 100 to get a percentage.
The majority of lenders prefer to see a DTI ratio of 36% or below, with no more than around 30% of that debt going towards your mortgage - although this may vary slightly depending on the lender.
Credit historyYour affordability, and mortgage application as a whole, can also be affected if you have a history of adverse credit. If you already pose a level of risk, i.e. you’re a visa holder, a poor track record of money management could further inhibit your chances.
To balance out the risk, lenders may also restrict the amount they’re willing to lend, or request a higher deposit be put down. While there are mortgage products for bad credit applicants, specialist advice may be required to locate one that also takes a flexible approach towards spouse visa holders.
These days, many mortgage providers are willing to look at the ‘bigger picture’ where bad credit is concerned. The severity of the issue will play a role, as well as how long ago it occurred and how your financial circumstances have changed over time
Property typeIf you’re looking to invest in a buy-to-let (BTL) property rather than a residential one, there are additional eligibility hoops to jump through. And as repayments for BTLs are typically dependent on rental income by tenants, mortgage providers tend to favour experienced landlords.
f you’re a spouse visa holder looking to invest in a BTL, you may find lender requirements are more stringent if you have limited knowledge or experience of the UK property and rental market.
It can also be more difficult to secure a loan on a ‘non-standard construction’ property, which are typically deemed as higher risk. If you’re not sure whether your desired property meets the ‘standard construction’ requirements, ask an advisor.
AgeYour mortgage options begin to change as you get older. Many lenders cap the maximum age at which you can take out, or finish repaying, a mortgage, which can impact the term lengths you may be eligible for.
Seek advice from a broker if you have any concerns regarding your eligibility for a spouse visa mortgage; our team of experts can talk through your options, and point you in the direction suitable providers to approach.
How do I get a mortgage if I have a spouse visa?The application process for getting a mortgage if you or your partner is living in the UK on a spousal visa works in a similar way to a normal mortgage. The steps include:
- Find a suitable mortgage.
- Prepare documents ahead of your mortgage application.
- Consider getting a mortgage agreement in principle (AIP).
- Make your formal mortgage application.
- Wait for a formal mortgage offer.
This will include how much you’re looking to borrow, your credit score, your affordability and whether you are looking to buy an investment or personal property. At this point lenders will also look at how long you have been in the UK, or intend to stay in the UK and how long you have left on your visa until its expiry.
Each lender will have different criteria regarding spouse visa holders, so it’s important to carefully prepare your application with the help of a broker to give yourself the best chance of obtaining a mortgage.
How can I improve my chances of obtaining a mortgage with a spouse visa?As with any mortgage, the final decision surrounding your mortgage eligibility will be at the discretion of your chosen lender - which is why working with a broker to find the most suitable deal is so important.
The following tips may help your chances of approval:
- Establish a credit history as soon as you move to the UK - using a credit card or taking out affordable finance plans can benefit your credit score provided you’re sensible about it and make timely repayments
- That in mind, it’s not advised to take out any form of credit in the lead-up to applying for a mortgage.
- Avoid missing any direct debit or loan repayments.
- Maintain an up-to-date address history, open at least one bank account and have utility bills in your name to establish multiple forms of proof of address.
- Save a larger deposit - 10 - 20% deposit is usually sufficient, but reducing the loan-to-value and also reduces the risk to the lender, so the more you can put down, the better.
- Apply for a mortgage when you have at least a year (preferably more) remaining on your visa.
- Prepare your application and the supporting documents with the help of a mortgage adviser to improve your chances of acceptance and make the process as smooth as possible.
Speak to an expert for mortgage visa holder adviceIf you or your partner is a spouse visa holder and you have questions surrounding getting a mortgage, don’t hesitate to get in touch.
Our team of expert advisors have plenty of experience securing visa holders with mortgages, and will take the time to get to know you and understand your requirements before making any recommendations.
Not only that, our extensive knowledge of the mortgage industry and lender-specific requirements means we can hook you up with exclusive deals which aren’t available on the high street.
Call us on 02380 980304 or submit some more information about your circumstances via our online contact form and wait for a callback.