If you are a foreign national living in the UK on a Tier 2 General Work visa or have obtained an Indefinite Leave to Remain (ILR) after completing at least five continuous years on a Tier 2 visa then you may want to buy a home in the UK. That purchase can either be temporary until you return to your home country or as a long term permanent investment. You might wonder whether you are eligible to get a mortgage in the UK or not because a common misconception is that visa status bars foreign nationals from obtaining a mortgage however this is not the case. The basic answer to this question is: Tier 2 visa or ILR holders are eligible to get a mortgage in the UK.
Expat Mortgage
If you are a non-UK citizen currently residing and working in the UK on a Tier 2 visa or ILR and intend to join the 63% of Brits who own their own home by buying your own property in the UK, the type of mortgage you will be looking for is an expat mortgage. It’s similar to any other mortgage but the process could involve a few extra hurdles.
Requirements Of Expat Mortgage
It is a little harder to secure a good mortgage deal being an expat in the UK, but if you have a stable career, high household income, and a good financial track record, you are definitely an attractive prospect to a mortgage lender. Although any lender will assess a mortgage application from an expat primarily on the usual affordability criteria and credit checks, different mortgage lenders take different criteria into account.
- Duration of Stay in the UK:
As a general rule of thumb, lenders will expect an expat to have been resident in the UK for at least two years – some may look for three years’ UK residency.
- Time Remaining on Tier-2 General Work Visa
Mortgage lenders also expect at least six months or one year time remaining before the work visa of an expat expires. They may also consider whether an expat’s visa is likely to be renewed or they are expecting to allow their visa to expire.
- UK-held Bank Account
Some mortgage lenders expect Work Visa or ILR mortgage applicants to have a UK-held bank account and/or savings.
- Legitimate Source of Income:
If your primary source of income comes from overseas including a business registered outside the UK, this will mean less transparency, and more problems in convincing mortgage lenders to lock a deal. You will be required to provide all the necessary paperwork to establish a legitimate and secure income stream.
- Traceable and Good Credit History:
Tier 2 visa holders having a poor credit history or an ILR holder with untraceable credit history could be a problem in getting an expat mortgage.
- Settled Lifestyle:
Any mortgage lender will ask to see proof of stable income and an address history during an expat’s mortgage application. Any expat with lots of different jobs and addresses over the last couple of years might face a tough time at the hands of lenders because this could make them appear like a flight risk to lenders.
- Age:
Mortgages have a time limit and mortgage lenders in the UK are rightly concerned about expats retirement plans. If an expat is old enough to retire in under 15 years, the lender may have anticipation regarding the repayments schedule.
Expat mortgage criteria may vary from lender to lender but above mentioned typical requirements will remain intact.
Some mortgage lenders are even more strict imposing more stringent requirements, however, in return, such lenders may offer more favourable terms.
