Skilled Worker Visa Mortgage

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Skilled Worker Visa Mortgage (Part 1)

Simon talks to us about a skilled worker visa mortgage. Episode one of two, recorded in June 2024.

Podcast approved by The Openwork Partnership on 5/7/2024

Can I get a mortgage in the UK on a skilled worker visa?

Yes, you could. While not every lender will accept an application from an individual in the UK on a skilled worker visa, there are plenty who will.

Ultimately, as a mortgage advisor, it’s our role to determine the lenders and products that would be accessible depending on a client’s individual circumstances.

What are the eligibility requirements for getting a mortgage on a skilled worker visa?

Each lender will have quite different criteria on what they’ll require for an individual on a skilled worker visa. Some are more favourable and lenient and others are quite strict.

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

Once we’ve met those standard criteria, there are further key areas that lenders look at if you’re on a skilled worker visa. These include deposit percentage, how long you’ve been a resident in the UK, how long remains on your skilled worker visa and your level of income.

For most lenders, a minimum of 25% deposit is required, and you’ll need to have been in the UK for a specific length of time. For others, the deposit or residency period might be irrelevant, as long as you’re earning a certain level of income.

So it could be a bit of a minefield, to be honest, and that’s why it’s important to discuss your individual situation with a broker. We’ll explain what might be possible, taking into account all the elements: where you’re from, your earnings, your deposit and everything else.

What maximum loan amounts can be obtained for a mortgage on a skilled worker visa?

The maximum you could borrow will depend on your own circumstances. It’s a balance of your income with any financial commitments you have.

The fact that you hold a skilled worker visa shouldn’t influence how much you could borrow. The standard affordability criteria would apply to you as for anyone. It’s just really an assessment of income and outgoings.

Are there any age restrictions for getting a mortgage on a skilled worker visa?

There are no age restrictions for holders of a skilled worker visa, other than standard age limits on a normal application for an individual that had indefinite leave to remain.

Do I need a job offer from a UK employer to apply for a mortgage on a skilled worker visa?

Yes, you would. For a mortgage application, we need to evidence to the lender what you’re going to be earning in order for the mortgage to be deemed affordable.

Some banks would lend to you based purely on a signed contract of employment, even before the start date for that role. It could even be a few months away. This could prove useful for those that are imminently changing jobs to a new employer, especially if they will be earning more. That’s going to increase the amount they could borrow.

If you’re coming to the UK on a skilled worker visa, however, while we could use the job offer as proof of income, the application might fall short on the credit scoring – because you haven’t got that period of residency in the UK.

If you’ve not lived and worked in the UK previously, lenders aren’t going to have any credit record for you. Typically, you need circa six months or so, sometimes more, to build up the required credit score in the UK. Lenders need to be able to find your records and make a decision on that basis to approve your application.

Are there any restrictions on the type of job or industry that qualifies for the skilled worker visa?

Not really. If the role is permanent, you’d qualify. The industry you work in wouldn’t have any bearing on the likelihood of being accepted for a mortgage.

What documents are required to apply for a mortgage on a skilled worker visa?

There are two elements to the application you’re making. There’s the standard side of what’s required for a mortgage application, and then additional information as the holder of a skilled worker visa.

Standard documents are ID, proof of address, proof of deposit and the origin of those funds. Money from overseas may or may not be acceptable to the lender – that’s something we would need to confirm.

You’ll also need your BRP card which is going to state all the details of your visa and the period remaining. Income documents will vary, depending on how long you’ve been in the UK and the lender’s requirements. Generally we’ll need three months’ pay slips and three months’ bank statements to corroborate the income you’re receiving.

Can I still apply for a mortgage on a skilled worker visa if I have bad credit?

Whether your credit is good or bad, lenders won’t be able to map this from overseas. That’s why you need to have some time in the UK to build up a credit record. How you’ve managed your finances abroad won’t have any bearing on the mortgage application we make in the UK.

If you’ve already had a negative credit impact since arriving in the UK, then yes, this is going to affect your ability to apply. Ultimately, each lender makes their own decision on credit scoring, based on their appetite to risk.

We can’t really say for sure what their decision would be until we run an Agreement in Principle, which is pre-approval for the mortgage we’d be seeking. That’s going to give us a clear understanding of whether or not you could proceed with an application.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Approved by The Openwork Partnership on 5/7/2024.

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Skilled Worker Visa Mortgage (Part 2)

Simon continues the conversation on applying for a mortgage with a skilled worker visa. Episode two of two, recorded in July 2024.

Podcast approved by The Openwork Partnership on 27/08/2024.

Can I apply for settlement or citizenship after holding a skilled worker visa?

Generally, after five years you may be able to settle permanently in the UK, by obtaining what is known as indefinite leave to remain or ILR.

From a mortgage perspective, when you have ILR it eliminates some of the criteria that we would previously have had to meet – and might have been a barrier to you purchasing a property in the UK.

With ILR, lenders will treat your application as if you’re a British citizen. This could also be helpful during your period of ownership. Perhaps someone purchased a property while holding a skilled worker visa and found that their lender options at that point were limited, because of the circumstances of their application.

They then settle permanently in the UK and hold indefinite leave to remain. When they come to remortgage, they’ll have a lot more options available. It massively opens up the market to more lenders. That may mean better options and potentially lower interest rates.

It could be very important when you’re considering your life cycle within that property, and what mortgage lenders are available to you.

Are there any specific policies or regulations related to skilled worker visas to be aware of when applying for a mortgage?

Each lender will have varying criteria for those who hold a skilled worker visa, some being more lenient and some more strict.

For an application, we have to fulfil all the standard UK requirements regardless of visa status. Essential documents include ID, source/proof of deposit and income documents.

Once those baseline criteria have been met, lenders then look at extra areas that might be important to them, such as the percentage of deposit you’re putting down, how long you’ve been in the UK, how much time you have remaining on your visa and your level of income.

With many lenders a minimum deposit of 25% would be required. Other lenders might disregard the deposit size altogether if the residency period is at a certain level. Some lenders disregard visa status altogether.

This shows the importance of our role as a mortgage broker, because each lender has its own set of criteria. We’re here to know that on your behalf and advise the right option for you.

How long does the mortgage application take if you are on a skilled worker visa?

Application processing time is generally unaffected by the visa status of the individual. How long it takes will just depend on how busy that lender is and the volume of applications they’re processing.

From the lender’s side, checking visa status and determining your eligibility is pretty quick and relatively straightforward.

What costs are associated with a mortgage on a skilled worker visa?

There are sometimes associated costs with an application, like valuation fees, mortgage product fees, arrangement fees and broker fees in some circumstances, but none of these are specific to holding a skilled worker visa. These would be the same fees and associated costs for any individual – regardless of whether they have indefinite leave to remain.

What are the potential risks associated with attaining a mortgage on a skilled worker visa?

As a skilled worker visa holder, you don’t have permanent right to reside in the UK. Purchasing a property for anyone, let alone someone that doesn’t have permanent right to reside, is a major, long-term financial commitment.

Ultimately, it’s a commitment you have to be comfortable with, knowing that your future in the UK isn’t an absolute certainty. There are many different elements to think about here, but as an extreme example, you might lose your employment through dismissal or something.

Your visa status is linked to your employment.

On a skilled worker visa, you’ve got a relatively short period, about two months, to secure new employment. Otherwise, the expectation is that you leave the country. That’s not an ideal situation to find yourself in if you own a property and you have a mortgage.

What advice or tips do you have for applicants considering applying for a mortgage on a skilled work visa?

I’m biased, of course, but speaking to a mortgage broker is a good place to start. Across the two podcasts, I’ve explained the specific and niche criteria with these lenders if you don’t have indefinite leave to remain.

Ultimately, it’s our job to know the criteria and advise you accordingly, depending on your specific situation. Deposit levels, income and period of residency all play a crucial role in whether you may be able to purchase property.

Don’t waste time and effort trying to find out whether you fit with these individual lenders. Get in touch with us, we’ll have a consultation with you, explore your specific circumstances and we could go from there.

Can you provide some examples of successful mortgage applications for clients on a skilled worker visa?

We had two clients buying together who had been searching for a mortgage themselves and been unsuccessful. They were pretty desperate to buy a property. Both had good levels of income and had saved to earn a 10% deposit.

They had been in the UK for two years and were unaware that one lender had a good option for them, where if their income was over a certain threshold, visa status and deposit would be irrelevant. They would just be treated as if they had indefinite leave to remain.

We were only just over that threshold, but it meant that they could actually purchase the property that they’d been looking at for a long time.

Having done their own research they thought it was completely unattainable, so it was a good result. Getting someone their dream home is obviously the most fulfilling part of my job. Just knowing the specifics of that lender’s requirements meant we could get around the minimum deposit level issue they’d faced before.

Is there anything else we need to know about mortgages on a skilled worker visa?

I think we’ve covered off pretty much everything across the two podcasts. Hopefully gives you a bit of detail about what you need when you’re thinking of making an application, and what lenders are looking at.