Tier Two Visa Mortgage
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Mortgages For Professionals with complex incomes through the main high street lenders
High street lenders typically provide more appealing rates, making them the preferred choice for many professionals seeking mortgage solutions. However, navigating the complexities of professional incomes can present challenges in securing loans from these lenders.
Professionals often assume they must seek alternative lenders due to the intricacies of their income streams. Yet, armed with a deep understanding of various payment structures, we confidently facilitate successful mortgage applications with high street lenders.
In fact, a substantial 93.4% of our mortgage applications are seamlessly processed through reputable high street lenders, showcasing our expertise in navigating complex income scenarios.
Tier Two Visa Mortgage
Peter Stokes explains how the mortgage process works in the UK if you have a tier two visa.
What is a tier two visa?
There are different types of visas and a tier two visa is sometimes called a highly skilled or skilled worker visa.
It’s probably the most popular visa type in the UK, used for foreign nationals whose occupation is beneficial to the UK. Often it’s where we have a shortage of skilled people and a visa is granted on that basis.
How do I qualify for a mortgage with a tier two visa in the UK?
The normal criteria still apply in terms of a certain level of income. You have to provide bank statements and proof of ID. But there are some extra levels of underwriting to get through.
Most of that criteria revolves around either how long you’ve been in the UK or how long is left on your visa. It varies from lender to lender. One of those categories might be short and one might be long.
I would suggest that you probably need to have been in the UK for at least six months. If you have over two years left on your visa, that’s generally not a problem. If you’ve been here for two years already and you’ve only got six months left on your current visa, again that should work. One or the other needs two years on it.
The only other key piece of criteria that’s different for a tier two visa application is the size of the deposit. It is possible to get a mortgage with a deposit of 5% or 10%, but the choices are very limited and it’s quite difficult. Generally, the lenders that assist those on a tier two visa will insist on a deposit of 25% of the purchase price.
Can self-employed individuals get a mortgage on a tier two visa in the UK?
A tier two visa applicant is likely to be normally a professional person. A medical role is the common one, and that in itself is not a problem.
Any self-employed applicant generally needs two years’ accounts or two years proof of income. You would need to have been in the UK for those two years to evidence that income.
If you’ve been in the UK for nine months and you’re self-employed on a tier two visa, it’s not necessarily the visa that’s the issue. It’s that you’ve only got nine months of self-employed income proof. You have to meet the normal criteria for a self-employed mortgage.
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Is it necessary to have a certain amount for a deposit when applying for a mortgage with a tier two visa?
The rules tend to be a little more restrictive compared to non-tier two visa mortgages. We have one or two lenders that potentially can lend with as low as a 5% or 10% deposit, but the vast majority of lenders require 25%.
Another issue to bear in mind with deposits for a tier two visa mortgage is where the money has come from. Some lenders require it to be in the UK already, gathered from here, or it’s your own deposit. They might not take gifted deposits, whereas with standard mortgages, gifted deposits aren’t an issue.
Again, there’s no single set of rules that everybody adheres to. However, if it was a foreign gift, that’s going to cut down the number of lenders considerably. We just have to be a bit careful on that.
What are the minimum and maximum amounts one can borrow on a mortgage with a tier two visa?
It’s generally no different to a standard mortgage. Once you meet the tier two visa criteria, you should be treated just like any other borrower. You’re likely to be a professional First Time Buyer, so in theory, mortgages in excess of five times your income could be available if you’ve got the right size deposit.
We might be operating from a smaller pool of lenders, which means some of the providers that lend larger amounts might not be available. But generally, you should be able to get the same from that lender as somebody who isn’t on a tier two visa.
What documents are required for a tier two visa mortgage application?
There will be all the usual requirements for standard mortgages, such as your bank statements, ID and pay slips. In addition, you are going to need to evidence your visa. You might have the original card or certificate, or you may have a share code, which we provide to the lender so they can see your visa status online.
We will also need a copy of your passport. Most lenders would also like to see a copy of your contract of employment – because the employment is crucial to the visa.
How long does the tier two visa mortgage process take from application to approval?
It is an extra level of underwriting, but that should all be addressed at the same time as the normal underwriting. Provided those extra documents are available, it shouldn’t be any longer than normal.
In terms of how long the whole process takes, it really depends on how busy lenders are and how much of the process they can automate. We could get this through some lenders in under a week, but others can take three or four weeks.
The average time from the start of an application to getting that written offer from the lender is about two to three weeks.
Are there any restrictions on the type of property that could be purchased with a tier two visa?
No. Again, if you meet the lender’s criteria, everything else should become standard. There are no limitations on different types of properties or different interest rates or anything like that. You either meet that criteria, or you don’t, but once you meet it, the mortgage is standard.
There are always certain property restrictions. If you’ve only got a 5% deposit and you want to buy a new build flat, that’s difficult whether you’re on a tier two visa or not. Otherwise, the normal property restrictions would apply in this scenario as to anybody else.
What are the interest rates and fees associated with getting a mortgage on a tier two visa?
They’re not priced higher. If you meet the criteria, you can access that lender’s standard products. As I mentioned earlier, if we are working from a smaller pool of lenders, we might not necessarily get the absolute best rate in the market.
At any time, the lender with the best rate might not do mortgages for those on a tier two visa. But a number of high street lenders do, so it should be standard products with standard fees.
Are there any additional costs that need to be considered when applying for a tier two visa mortgage?
No, it should all be quite straightforward. The only thing is that if your visa is coming up for renewal in a matter of weeks, you may wish to apply to get that extended prior to your mortgage application – it can help.
Obviously, there may be some costs involved in that, but you would have faced those anyway. So in terms of getting the mortgage, there are no additional costs.
What if I have bad credit? Can I still apply for a mortgage with a tier two visa?
Yes, there’s nothing to stop you. Again, they’re two separate pieces of criteria. As for anybody that has bad credit, it depends on how bad it is, why it occurred and when, and whether it has been settled.
If you add the complication of a tier two visa to the bad credit, that’s two hurdles we have to get over instead of one. But, if you meet the tier two criteria, we move onto the hurdle of the bad credit. That will be dealt with the same way as for any standard application.
It’s certainly not impossible. The level of the problem will determine the options and which lenders we can approach – whether they be mainstream or secondary market.
How does remortgaging work for those on a tier two visa?
That should be more simple, because if you’ve qualified for a mortgage the first time around, you’ve already met the criteria. It could still be a limited pool of lenders, and we’ve always got the ability to renew you with your current lender, which has no underwriting at all.
Remortgaging is generally easier than a purchase, because you’ve already met the criteria once already.
Can I get a Buy to Let mortgage on a tier two visa?
There’s no reason why not. The minimum deposit on a Buy to Let is 25% anyway, so you’re more likely to fit that criteria.
Normally, you would qualify for indefinite leave to remain within five to six years. One of the general rules on Buy to Lets is that most lenders require you to already be a homeowner, which means you’ve already got a residential mortgage. Whether you could get a residential mortgage within that six year period and then have enough savings to get a Buy to Let is perhaps questionable.
If you want a Buy to Let without owning your own home, that’s difficult but not impossible. I suspect it would become more difficult if you’re on a tier two visa as well – because the lender would be concerned about whether you plan to stay in the UK. Getting a main residence mortgage does demonstrate that you are staying.
Getting a Buy to Let mortgage in addition to a main residence mortgage on a tier two visa is
not really an issue. Purchasing a standalone Buy to Let without owning your own home is a lot more difficult.
How can a mortgage broker help with mortgages on a tier two visa?
A broker who knows this market is going to be invaluable. Mortgages aren’t easy to get at the best of times, and the more layers of difficulty that are added, the more difficult it becomes to place it with the right lender at the best rate.
Any mortgage broker that has worked with professionals on a tier two visa is going to be invaluable to you, without a doubt.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
