Navigating the path to homeownership can be complex, especially when visa statuses are involved. For many couples, securing a joint UK mortgage is a significant milestone, but questions are often raised regarding eligibility and feasibility.
Whether you’re on a work visa, spouse visa, or another type of temporary residence, understanding how lenders approach these situations is crucial. In this blog, we will explore the possibilities and considerations involved in obtaining a joint mortgage when both partners are on visas.
Simply stated, yes, it is possible to get a joint mortgage if both partners have visa status, including those with indefinite leave to remain, however several factors need consideration.
Lenders assess the stability and validity of your visas to ensure you can legally stay in the country for the mortgage term. They also evaluate your income stability, employment status and credit history to determine affordability. Having a sufficient deposit is crucial and demonstrates a commitment to the mortgage.
Different visa types may impact lender criteria; therefore, seeking professional advice from a mortgage broker like Simmonds Mortgage Services, who are familiar with visa applicants for a mortgage loan, is highly recommended. Get in touch with us today.
My spouse and I are both on a visa. Can we get a joint mortgage?
Yes, you and your spouse can potentially get a mortgage even if you’re both on visas, but it depends on the specifics:
- Visa Types and Validity: For couples applying on work visas, lenders will look for assurances that both visas are valid for a substantial part of the mortgage term or all of it. Ensure your employment contracts and visa status provide long-term stability and assurance. You can also get a mortgage on a spouse visa (which grants ‘indefinite leave to remain’ in some cases) and if your partner is on a work visa, , lenders will similarly asses the duration and terms of both visas to ensure legal residency during the repayment period. They may also require proof of the spousal visa holder’s right to work in the UK.
- Income and Affordability criteria: Both partners must demonstrate stable incomes and ability to make the monthly repayments. This includes providing proof of employment and income stability for lenders to assess your ability afford the monthly repayments. If you are married and one applicant has no income, this is ok as long as the household can support the mortgage payments.
- Credit history: The credit footprint of each partner will be assessed to judge financial responsibility. A good credit report demonstrates your ability to manage debt and meet financial obligations.
- Deposit Requirements: Having a larger deposit may improve your chances of approval and potentially secure a more favourable deal. Typically, a deposit of at least 25% of the property’s value is required for a buy-to-let mortgage, regardless of whether an applicant has a visa or is a UK citizen. For residential mortgages, there are options with 5% deposits, but typically, 10% to 25% would yield better rates.
What visas are accepted on a joint mortgage?
Indefinite leave to remain (ILR) signifies a permanent right to residency and work in the UK, making it highly acceptable to mortgage lenders as it offers long-term stability.
Spousal visas with Right to Work are usually accepted on a joint mortgage, provided it has sufficient validity remaining, they are very favourable visas for lenders.
It is also possible to get a mortgage with a Tier 2 skilled working visa. The mortgage application process is very similar to that of any other mortgage applicant. Lenders will review the duration of your visa, your credit history, income and expenses to determine your ability to repay the loan. Some lenders will only accept mortgage applications from those with Tier 2 skilled working visas if they already have a UK-based current account or savings account.
If you have pre-settled status it is possible to get a joint mortgage, however you need good credit history in the UK and proof of income. As pre-settled status is only temporary, many lenders may have tighter criteria to approve mortgage applications due to possible uncertainties.
Those on a student visa may find it harder to get approval on an application from most lenders due to the associated high risk. A large down payment on the property and proof of income is crucial to improve chances of obtaining a loan.
If you are on a BNO Visa from Hong Kong, you would typically need a larger 25% deposit or have been resident in the UK for over 12 months.
Are there specific mortgage lenders that cater to non-UK residents?
Most banks and financial institutions specialise in providing mortgages to non-UK citizens but they each have their own mortgage eligibility criteria.
For instance, some may lend to those with a settled status but not to those with a pre-settled status.
A broker can be a valuable asset as they understand the unique circumstances of visa holders and assess your individual situation to find the right lender and suitable mortgage for you.
The mainstream lenders who look at foreign nationals favourably are HSBC, Halifax, Nat West and Barclays, they all have varying criteria including the loan to value being capped at 75%, or minimum income levels of £75,000 + or having resided in the UK for 12 months or more.
Are mortgage terms stricter for non-UK national applicants?
Yes, terms are generally stricter for foreign applicants on Visas, compared to those for a UK resident. Many financial institutions require higher deposits, more rigorous income verification and credit history scrutiny.
Non-UK national applicants might have limited access to certain products, such as interest-only mortgages. Furthermore, there may be shorter loan terms imposed and additional fees to cover the increased costs of processing mortgages for such applicants.
Are there any differences in interest rates for non-UK national applicants?
Foreign national applicants may be offered higher interest rates compared to British national applicants due to the higher loaning risk perceived. However, many mainstream lenders will offer the same rates as long as the above mentioned criteria is met.
Is there a minimum deposit percentage required for visa holders?
Typically a larger deposit ranging from 10-25% of the property value is needed from foreign national applicants to get a mortgage.
This reduces the lender’s risk if they need to repossess the property. Some banks are now coming out with 5% mortgage options however the rates will be much higher than other standard 5% rates.
What happens to the mortgage if one visa holder leaves the UK?
If one applicant leaves the UK and the joint tenancy, the remaining partner must demonstrate they can afford the payments alone. If not, the lender may reassess the situation and decide which option is best to proceed with, such as remortgaging, selling the property or transferring the departing partner’s equity to the remaining partner.
If the remaining partner has permanent residency in the UK, they can likely continue making payments and remain on the mortgage agreement.
Looking for a mortgage broker that works with foreign nationals? Get in touch
Start your mortgage process with Simmonds Mortgage Services to get better chances on your mortgage approval and let us assist with your search. We specialise in helping applicants on Visa’s acquire property in the UK, so feel free to reach out to Andrew and Daniel.
Further reading:
