Tier 2 Visa Mortgages
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Mortgages for Tier 2 Visa Holders
Lenders will primarily look at your application through the perspective of their usual credit checks and affordability assessments, but will also take two other important factors into consideration:
- The length of time you have been resident in the UK.
- The remaining time left on your Tier 2 visa.
There is no hard-and-fast rule for the amount of time you should have been living in the UK, but generally most lenders will require at least two years residency, while some will expect you to have been living here for three years. This is quite common in general mortgage eligibility terms, and ensures that an applicant has been in this country long enough to build up a reliable credit history and employment track record. Some lenders will also stipulate that Tier 2 visa applicants have a current account or savings with a UK-based bank.Read More
Lenders will also typically expect a period of at least six months to a year to be remaining on the Tier 2 visa. They will also usually ask if you are likely to renew the visa due to ongoing employment in the UK as a skilled worker, or if you intend to let it expire at the end of the valid period. This will help them identify the motivation for the purchase, which may influence the kind of mortgage you can apply for.
Tier 2 Visa Mortgage Information
Can I get a Tier 2 Visa Mortgage with Bad Credit?
If you have been unfortunate enough to suffer some financial difficulties – whether very minor or something more serious – then this can have an influence over how much and under what terms lenders will be willing to offer you for a mortgage. If you are resident in the UK on a Tier 2 visa, then any difficulties may seem exacerbated.
However, obtaining a Tier 2 visa mortgage with a bad credit history is entirely possible. As with most things in the mortgage industry, a lender’s decision will be based on all the unique aspects of your personal circumstances, which will include your income and level of deposit, as well as the exact issues on your credit history and how much time has passed since they occurred.
As availability could be limited, the only way to find out your options for certain is to talk over your situation with an experienced mortgage broker who knows the market inside out and has great relationships with lenders from across the entire industry in the UK. This will include both those on the high street and niche-market specialist lenders you won’t be able to approach directly yourself.
Mortgage Lenders if I have a Tier 2 Visa
Lenders will look at three key general factors when considering your mortgage application:
- The information you provide about yourself and your personal circumstances – You’ll find most lenders use their own points-based scoring system to determine how much of a risk (or not!) you present as a borrower. They’ll consider aspects such as your age, how long you have been in the UK, the length of time you have lived at your current address, how long you have been in your current employment, any dependants, and so on.
- An assessment of your ability to afford the mortgage repayments – This is probably the most important factor that a lender will consider. All lenders are obliged legally to check that borrowers can afford to keep up monthly mortgage payments. If they perceive that this is not the case, then it’s likely they will decline your application. They’ll look at your commitments and verify your income against bank statements, payslips or tax documents.
- Information obtained from external credit reference agencies – Lenders will be likely to check all three of the main credit reference agencies in the UK: Experian, Equifax and TransUnion. Each holds information about your history of credit and borrowing, from any loans to credit cards, store cards, utility bills, phone accounts, overdrafts, etc, and will include notes of any missed or late payments, defaults and disputes.
Will lenders reject me because of a Poor Credit history?
A bad credit history can result from a number of events, of varying degrees of importance. Some items that will contribute towards a poor credit score will be:
- County Court Judgements – known as CCJs, these are when someone has taken action against you to recover money after one or more missed payments and a court has made an order for you to pay the money.
- Defaults – when you have missed payments or simply failed to meet the conditions or your obligations on a loan agreement, for example: not meeting mortgage repayment instalments.
- Individual Voluntary Arrangements – known as IVAs, these are when you will have entered into a formal plan to repay monies owed to one or more parties, usually taken out as a way to avoid bankruptcy.
It’s true that past credit issues can make it more difficult to obtain a mortgage, but there are ways to put your credit history in better light, and it’s by no means impossible to get a mortgage with a poor credit record. There are lenders, particularly specialist lending companies who you will not see on the high street or online, who take a broader view of an applicant’s credit history and accommodate people with black marks on their record.
It’s also worth bearing in mind that the older the bad credit events are the less weight they will carry with a lender, and as your credit records only cover the last six years, anything older than that will not appear.
At The Mortgage Centres, we have a great deal of experience in helping people with a poor credit history to obtain a mortgage, even those who are also living and working in the UK on a Tier 2 visa. You may have unfortunately defaulted on payments on an unsecured line of credit and your visa may have less than six months remaining, but we have successfully secured a mortgage for people in this position and similar in the past, often securing more favourable terms that you would have expected even without the bad credit problem.
Thanks to our great relationships with lenders from across the spectrum of the UK mortgage market, we have access to ranges of products that you will not find advertised or featured on lists, and are often able to obtain deals, rates or terms on an exclusive basis.
Can I get a Buy to Let Mortgage with a Tier 2 Visa?
Investing in a property in order to let it out to tenants, as well as potentially profit from the increased value in future, is still very popular despite the many regulation changes in this sector in recent years.
You would not be declined a Buy to Let mortgage based on your Tier 2 visa status alone, but lenders do have to apply very strict criteria to applicants for this kind of mortgage. In particular, they will want to see a higher level of deposit than you would otherwise expect for a residential purchase, and will assess your cash flow forecast thoroughly to make sure the business side of the investment is sound.
With criteria varying greatly from one lender to the next, it is vital that you get the most relevant and up-to-date information, whilst being aware of the deals on offer and their conditions, so you know who will be the right lenders to talk to in your individual case.
Foreign National Mortgages
You do not necessarily need to have a Tier 2 visa to get a mortgage in the UK. Mortgage agreements for foreign nationals in general usually follow very similar criteria. Lenders will normally require you to have been resident in the UK for at least two (or in some cases three) years, to be in permanent employment in this country and to have a UK-based bank account. They will also expect you to have an appropriate work permit, if necessary, or permanent residency rights in the UK.
Foreign nationals on a Tier 1 visa often have greater advantages than those on Tier 2 visas, as they are usually in possession of greater capital and will be looking at more exclusive or expensive properties. This will allow them to access a broader range of lenders, including private banks and specialist lending companies, and more favourable deals and rates. Those on a Tier 1 visa typically include:
- Tier 1 (Entrepreneur) visa – for individuals with at least £50,000 investment funds to set up and/or run a business in the UK.
- Tier 1 (Exceptional Talent) visa – for individuals who are emerging or recognised leaders in a particular field and endorsed by the Home Office.
- Tier 1 (Graduate Entrepreneur) – for graduates with a genuine and credible business idea who have been officially endorsed by either the Department for International Trade or a UK higher education institution.
- Tier 1 (Investor) visa – for individuals with investment funds of £2,000,000 or more to apply within the UK.
Tier 5 visa holders (foreign nationals working in the UK in charities, religious institutions or as part of a Government-sanctioned exchange) are considered by lenders to be temporary workers and so would be unlikely to be granted a mortgage in the UK.
Mortgage Advice for Foreign Nationals
If you meet all the criteria put forward by a lender, then you should be able to obtain a mortgage as a holder of a Tier 2 visa in the UK. However, the process of applying for a mortgage can sometimes seem like a minefield for anyone applying for a mortgage.
At The Mortgage Centres we have a team of highly experienced advisers, including specialists in mortgages for foreign nationals on Tier 2 visas – even those where the visa is due for renewal or your credit history may include some adverse credit events. We’ll be able to identify exactly the right mortgage lender and product to meet your needs and help with every part of the application to give it the best chance of success.
Feel free to give our expert team a call to arrange a no-obligation consultation, which will quickly determine what your options are and how much you could expect to borrow.