Does visa status affect mortgage applications?

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Does visa status affect mortgage applications?

Does visa status affect mortgage applications?
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    One question that often comes up from visa holders is, ‘Can I get a mortgage as a visa holder in the UK?’ Let’s explore the options for buying property if you are in the UK on a visa.

    It may be harder to get a mortgage if you are not a UK resident, but it’s not impossible. Visa type, length of time living in the UK and your financial circumstances can all affect your ability as a foreign national to get a mortgage.

    How long do I have to live in UK before I can get a mortgage?

    Most lenders stipulate that visa applicants should live in the year at least 1-3 years before they will consider an application. It usually takes at least two years to build a sufficiently robust credit history that meets mortgage eligibility criteria.

    Some lenders can look at a shorter term, but these lenders would usually require a higher income like £100,000.

    What do mortgage lenders take into consideration for foreign national applications?

    Mortgage lenders will review not just your financial situation but also the status and type of visa before making a mortgage offer to a foreign national. Some lenders look for higher income levels.

    Current visa status

    A tier 2 visa (also known as a skilled worker visa), which has at least a year remaining, is the minimum you will need when you make your application. If you have longer to run on your visa, you may find it easier to obtain a mortgage in the UK.

    Current employment

    You’ll need to be in employment and able to evidence your income in a UK bank account before you can complete the mortgage process.

    If you have indefinite leave to remain

    Indefinite leave to remain means you have lived and worked in the UK for at least 5 years and you have successfully applied for the permanent right to live in the UK. This isn’t the same as being a UK citizen but it does mean you are likely to get access to a suitable mortgage so you can buy a UK property.

    Income and affordability

    Lenders’ criteria for a foreign national mortgage can often be stricter than for UK citizens. Some lenders will require a much higher income, perhaps as much as £75-£100K a year to meet the lender criteria.

    Deposit size

    Many lenders will require a larger deposit for visa mortgages vs a normal mortgage for a UK citizen. This could be 25%. This is because you will be deemed to be a higher-risk customer. The mortgage interest rate will likely be higher as well. There are some lenders who can use a lower deposit for example 10%, especially for higher earners or people who are married to British Citizens.

    Ways to improve your mortgage application as a foreign national

    Getting a mortgage can be tricky even for UK citizens, so for foreign nationals, it’s sensible to get support to access specialist visa lenders from a mortgage broker.

    Advisory from a specialist mortgage broker

    Specialist brokers like Simmonds Mortgage Services understand the UK mortgage market. They have access to specialist lenders and products that individuals can’t access on their own. They can provide mortgage advice tailored to your personal circumstances, helping you find the best deal for your residential or buy-to-let mortgage.

    Correct any errors on your credit report

    Your credit score will be checked by your mortgage lender to ensure you have a good credit history. Review your credit report for any errors and have any problems fixed as soon as possible as a bad credit rating could delay or prevent your mortgage application.

    Boost your credit score

    You can improve your credit score by:

    • Making any loan, store card, or mobile phone contract payments on time.
    • Apply for an overdraft and always stay within the limit.
    • Apply for a credit card and pay it off in full every month.
    • Increase your credit limit on an existing card but never use up more than 25% of the limit at any time.

    Getting a joint mortgage

    You may find it easier to get a mortgage if you make a joint application, especially if the other mortgage applicant is a UK citizen.

    Looking for a mortgage as a foreign national? Get in touch with Simmonds Mortgage Services

    Simmonds Mortgage Services is a specialist broker providing support for all types of UK visa applicants. We have access to the best mortgage rates from many lenders who are happy to lend to those with a tier 2 visa. Call us on 01184 693037 today to discuss your situation.

    Frequently asked questions about getting a mortgage with a visa

    Does BRP count as a visa?

    A BRP or Biometric Residence Permit is an identity card that includes various data about the holder, such as name, date and place of birth, immigration status, and biometric information such as a photograph and fingerprints.

    If you hold settled or pre-settled status, indefinite leave to remain or a Tier 2 visa, then you may be accepted for UK mortgages if you meet all the other mortgage criteria.

    Can I get a mortgage if I have a spousal visa?

    Spousal visas which are granted to those married to UK nationals, typically enjoy the same rights to – to live and work in the UK as tier 1 and tier 2 visa holders. This means you can apply for a visa mortgage as long as you meet lending criteria.

    A spousal visa is deemed less risky, which means affordability criteria may be more relaxed, and you might also get a better loan to value products. An alternative to this is to get a joint mortgage.

    Can I get a mortgage with a student visa?

    It’s usually difficult to secure a mortgage if you are in the UK as a student. However, there are mortgage brokers who can access special products so it’s always worth having a chat with an experienced mortgage advisor.

    Can I get an investment property on a visa?

    It is possible, but it may be more difficult to secure an affordable product. Buy-to-let mortgages come with higher interest rates than residential mortgages so you’ll need to show that the rental income will comfortably cover your monthly mortgage repayment. BTL mortgages also require a higher deposit than standard mortgages.

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    Andrew Simmonds

    Andrew Simmonds is the managing director at Simmonds Mortgage Services. He's been providing mortgage advice to home owners for many years.

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