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Tier Two Visa Mortgages

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Tier Two Visa Mortgages

Tier Two Visa Mortgage

Simon Hart talks us through getting a mortgage on a tier two visa.

What is a tier two visa mortgage?

There isn’t really a specific tier two visa mortgage, but there are numerous mortgages available to an individual who is the holder of a tier two visa.

As a mortgage adviser, we would locate the products and lenders that are accessible to that individual, depending on their circumstances.

How do I qualify for a mortgage on a tier two visa in the UK?

Each lender will have quite different criteria on what they’ll require from an individual on a tier two visa. Some are more favourable and lenient to people on a visa, while others are quite strict. Some lenders don’t accept applications for clients that have tier two visas at all.

First and foremost we need to satisfy all of the standard requirements for a UK mortgage application, regardless of visa status. That involves having standard things like ID documents, a deposit and proof of where that’s coming from. You will need to prove sufficient levels of income to sustain the mortgage payments.

But there are additional elements for a tier two visa holder that are slightly less binary. A good place to start is the period of residency in the UK. That’s one of the main elements of determining if you would qualify for a mortgage as a holder of a tier two visa. Lenders may have a minimum requirement which again does vary. Typically it’s between one and two years.

They’d also be looking at how much time you have remaining on your visa. Some lenders have a minimum requirement of 18 months, for example.

Lenders may also require a minimum level of deposit for an application. If we fall below that threshold, for a lot of lenders we just wouldn’t qualify, unfortunately. That’s why we look at the different variables – your income, how long you’ve been in the UK etc., as those details may actually allow you to put down a lower deposit.

There are one or two lenders where if you have certain, fairly high levels of income, they might overlook the fact that you don’t have indefinite leave to remain. That can be quite good for clients on a tier two visa because generally if you are coming to the UK for work, it’s likely you’d be in pretty good employment with strong earnings.

What documents are required to apply for a mortgage on a tier two visa?

You’ll need the standard documents for ID, proof of address and proof of deposit. Understanding the origin of those funds is important from the lender’s point of view. If it’s coming from overseas that may or may not be acceptable.

You will also need your BRP card which is going to state all the details of the visa and the period remaining. Income documents will vary again, depending how long you’ve been in the UK and the lender’s requirements, but generally you will need pay slips and bank statements that corroborate the income being received.

Can self-employed individuals on a tier two visa get a mortgage in the UK?

Strictly speaking, the tier two visa is a work permit designed for those who’ve received a job offer from a UK sponsor. So people generally have employed work.

There are very occasional circumstances where you might be on a tier 2 visa and want to register as self-employed, but it would normally be supplementary to the employed work that you’re doing. It’s only really allowed in very specific circumstances.

There are certain allowances of how many hours you can work per week. A tier two visa offers employment for someone based overseas to come here for skilled work, so self-employed applications are unlikely to be accepted.

Is it necessary to have a certain amount for a deposit when applying for a mortgage on a tier two visa?

Generally there is a minimum deposit required, and as a rule of thumb it’s probably about 25%. Some lenders may accept a lower amount than this, some will require more.

Again it can vary depending on the period of residency, how much mortgage is required and how long you’ve been in the UK. Some lenders are better for clients on tier two visas than others, particularly when it comes to deposit.

As an example, if you’ve been in the UK for over two years, some lenders may allow applications with as little as 10% deposit. If you meet certain thresholds of joint income or single income, some lenders will disregard the level of deposit or even the fact that you have limited leave to remain on your visa. They will just treat you as if you have indefinite leave to remain or as a British citizen.

What is the minimum and maximum amount I can borrow for a mortgage on a tier two visa?

The amount that you can borrow is generally dependent on your own circumstances, balancing your income with any financial commitments you have. The fact that you’re a holder of a tier two visa shouldn’t influence this.

Standard affordability criteria would apply to you as they would to anyone. It’s just really an assessment of the level of income that you’re receiving against the commitments you have – that’s what determines how much you can borrow. 

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How long does the tier two visa mortgage process take from application to approval?

It does vary slightly, but again it shouldn’t really have too much of an influence on the application itself. There may be a few extra underwriter checks in reviewing your visa and identity documents. But that’s not going to take a significant amount of time.

It varies from lender to lender for all applications, not just because an application is for someone on a tier two visa.

Are there any restrictions on the type of property that can be purchased with a tier two visa?

No, not really. Once we get past the lender’s requirements to accept an application, there shouldn’t be any difference. Affordability, processing time and the types of property that you go for shouldn’t be influenced by the fact that you’re a tier two visa holder. These will just follow the lender’s general property criteria. It wouldn’t vary person to person.

What are the interest rates and fees associated with getting a mortgage on a tier two visa?

The mortgage products that a tier two visa holder can access are the same as for everybody else. There aren’t bespoke products for this type of application. You would just be selecting a mortgage product from a lender’s range. You’d be paying the same amount as anyone, as long as you meet the criteria.

Are there any additional costs that need to be considered when applying for a mortgage on a tier two visa?

Not really, no. There may be associated costs when you are dealing with a solicitor in terms of checks on your identity, but as a mortgage broker we would treat an application from a tier two visa holder in the standard way.

What else do we need to know about tier two visa mortgages?

I’ve spoken very generally here. In reality it can vary – there is no single rule to suit everybody in terms of applications with tier two visas. It varies massively depending on your circumstances, your residency in the UK, the level of deposit, your income and the lender.

Lenders’ policies change often and they can withdraw options and add preferable options for individuals at any time. We’ve seen changes in the last week or two that would be of interest to tier two visa holders, so I would advise speaking to a broker as early as you can in the process.

Something I haven’t really mentioned is credit scoring, where again, there’s no real rule around how long it takes to build up the required credit profile in the UK. It’s really something we will determine when we start the process.

We will apply for something called an Agreement in Principle, where the lenders look at your credit profile and decide if there’s a long enough period of residency and evidence of who you are in the UK to then lend you the required borrowing.

It’s only something we can find out at that stage because there’s so many variable elements in an application. So reach out and discuss all your circumstances. We can find bespoke solutions for you. You may actually be able to do more than you thought, or more quickly. So seek our advice as soon as you start thinking about buying a home.