Tier Two Visa Mortgage
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Tier Two Visa Mortgage
Tier two visa mortgages with Hemat Natha.
What is a tier two visa mortgage?
There isn’t a mortgage per se called a tier two visa mortgage – it’s more about helping people in this specific situation. A tier two visa is your immigration status.
It applies to skilled workers from outside the EU who come to the UK to work for an approved, licensed employer. The government approves you and gives you a visa for a certain length of time. Many people will then look to buy a house and settle down here.
So a tier two visa is part of your identity and status in the UK, and it’s something that lenders do take into account when applying for a mortgage.
How does someone qualify for a tier two visa mortgage in the UK?
A mortgage is a mortgage – lenders will ask the same questions. But with tier two visas they ask a couple of additional questions to applicants. Typically this is about how long their residency is or how long they have been in the UK.
Criteria can vary for people who have been here less than six months, from six to 23 months, 24 to 35 months or more than 36 months. We also need to know when the visa expires, with roughly the same timeframes.
The last question we’ll ask applicants is what Loan to Value they’re going for. Loan to Value is the size of the loan divided by the purchase price – it gives you a percentage. Is it 70% or less, 81% to 85% or more? Those questions will help us through the mortgage process.
What documents are required for a tier two visa mortgage application?
The documents are largely the same as for any mortgage, but an important one here is making sure that we’ve got your passport and your visa document. Both obviously need to be valid.
The rest of the documents are standard. We ask for your credit profile which gives an indication of how well your credit is being maintained in the UK. We recommend Checkmyfile because it looks at the three biggest credit reference agencies in the UK.
Then, based on your employment status, we will ask for relevant documents like payslips, bank statements, company accounts and tax returns. Then we’ll ask specifically about the property you want to buy.
Can self-employed individuals on a tier two visa get a mortgage in the UK?
Yes of course, as long as you can answer those first three questions – how long you’ve been in the UK, when does your visa expire and what Loan to Value you need.
Then it’s down to your income and the documents that prove how much you earn. We’ve done a podcast on self-employed mortgages, which explains the different types of self-employment: sole trader, limited company directors etc.
You can also include income from UK property and benefits. We’ve got some clients that use income from private pensions as well. You can also use the state pension. So we can use all forms of income. But in answer to the question, yes, self employed people can get a mortgage on a tier two visa.
Is it necessary to have a certain amount for a deposit when applying for a tier two visa mortgage?
It depends on the length of time you’ve been in the UK. Some lenders will go up to 90% or 95% Loan to Value if you’ve been in the UK for 36 months or more. If you’ve been here for less than two and a half years and have limited time remaining on your visa, the amount you can borrow may be more limited.
I suspect that’s because lenders want to know the visa is going to be renewed before lending you so much money. Lenders don’t want a person to go back home and force them to repossess the property.
What is the minimum and maximum amounts someone can borrow on a tier two visa mortgage?
You can borrow the amount that your income allows you to borrow. We’ll take all forms of income into account and use affordability calculators with all the lenders that will accept your visa status.
If you have sufficient deposit and you meet the affordability criteria, lenders will confirm how much you can borrow.
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How long does the tier two visa mortgage process take, from application to approval?
Applying for a mortgage takes the same amount of time regardless of your visa status. It’s all lender driven. We’ve got lenders that could offer a mortgage within 24 hours, and we’ve had some remortgages offer within three hours because of automated valuations.
But some can take quite a while, typically around eight or nine days – especially if we have to provide some additional documents or details. We will take you through the whole process. We’ll have an initial consultation, make an application, do online meetings and walk you through everything.
Our average time for residential mortgage at the moment is six or seven days – and we do a mixture of different application types including Buy to Let and residential.
Are there any restrictions on the type of property that can be purchased with a tier two visa mortgage?
No, other than that obviously you need to be able to borrow the amount of money needed. You could have all different types of property: flats, listed buildings, barn conversions. We’ve done mortgages on some weird and wonderful properties. As long as you qualify for the lenders’ criteria, they will lend you the amount you need.
Don’t worry about the property. We’ll check it out before we apply so it won’t be a wasted application.
What interest rates and fees are associated with a tier two visa mortgage?
They are the same as any standard mortgage. Interest rates change on a daily basis, so it’s best to contact us, let us understand your circumstances, do a search and give you a specific answer.
Typically people do searches online and will get excited by a shiny rate at the top of the Best Buy table – but often that rate isn’t available on the amount you need, or you wouldn’t qualify for it. We’ll give you the appropriate rates based on your circumstances.
In terms of fees, you’ll typically have valuation fees and if you’re going for a survey there will be fees for that. Often there are lender arrangement fees as well. There could also be a broker fee involved – we charge a fee that’s typically payable once the mortgage is offered. We make that fee very clear when we have our initial conversation.
You should also allow for stamp duty on a purchase and legal fees are standard with most property transactions.
Are there any additional costs that need to be considered when applying for a tier two visa mortgage?
Alongside arranging a mortgage, we make sure our customers are able to stay in the property safe and secure, even if the unexpected happens. An example is if you are unable to work for a prolonged period of time. It’s important to think about how you would be able to afford your monthly mortgage payments if that were to happen.
One in two people get cancer in their lives, and I’ve had family members with experience of this. You don’t want to be in a position where you’re not able to make those monthly payments. So we do recommend taking out insurance, like life cover, critical illness and income protection.
You’ll also need buildings insurance as well. That’s a legally binding thing that the mortgage company will want you to have. Contents insurance is optional but it’s best to have your possessions protected as well. So those are additional monthly costs to consider along with the mortgage.
What else do we need to know about mortgages with a two tier visa?
Sometimes people procrastinate and hesitate to actually make the call. They might think they can’t buy a home because of their visa status. But that’s not necessarily the case – so do just pick up the phone and ask us the questions you’re wondering about.
We’ll let you know where you stand with regards to a mortgage and we will help you buy your home. A couple of years ago, when I was first advising, we had a customer who enquired with us. They didn’t have the required visa status or length of stay for a mortgage then, but they came back 18 years later and we secured them a home. We will always keep in touch – if you’re not ready now, it’ll just be a matter of time. We’ll help you through the process.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
Hemat Natha, trading as Mortgage Advice Point, is an Appointed Representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority.
A fee for our service is charged. This is typically £495 but the exact amount will be dependent upon your circumstances and we will discuss this with you.
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