Tier Two Visa Mortgage
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Tier Two Visa Mortgage Frequently Asked Questions
Listen below as Michael Webb talks all about Mortgages on a Tier Two Visa.
In just over 15 minutes, you’ll know a lot more about getting your mortgage sorted.
What is a tier two visa mortgage?
A tier two visa mortgage is an application for an individual in the UK on a tier two visa.
A tier two visa is given to a skilled worker that has been sponsored by a company to come to the UK and work for them. It’s very common within the healthcare sector and is a very popular way for skilled workers to come to the UK with a view to living here permanently.
Over a period of time living here, typically five years plus, they can then apply for indefinite leave to remain.
How does someone qualify for a tier two visa mortgage in the UK?
There’s no such thing necessarily as a tier two visa mortgage. It’s more that there are criteria within a mortgage application that you would have to fit.
Typically, you will need to have resided within the UK for a period of time – the specific timing will vary from lender to lender. Some may accept you from just arriving while others will want you to have been here for three years.
There will be other requirements around your visa that are going to be relevant – how long is remaining on the visa is quite critical. Criteria are fluid and always changing lender to lender. Another important factor is whether your visa is going to be renewed.
What documents are required for a tier two visa mortgage application?
You need to have a UK bank account that your salary is paid into. You also need proof of your deposit and your pay slips.
If you’re looking to purchase rather than remortgage, the location of your deposit is important. Is it in the UK banking system? Is it overseas? Is it being gifted from family abroad? These are all significant bits of criteria that you need to speak to a mortgage broker about, to make sure we’re going to the right lenders for your situation.
It’s highly likely that your foreign passport will be required. You’re also likely to have a UK biometric ID card that states that you are here on a tier two visa. It will also confirm the duration of that visa before it needs renewing. You will need to provide the original of that to your mortgage broker for copying.
There’s also the possibility that, depending on how you’re set up with the government, you may need a share code to supply both to the mortgage broker and to the bank. They can then log on to the government immigration site and check that your ID and photo match up.
So there are a few more document-related hoops to jump through compared with a British national applying for a mortgage. They’re all around your right to remain and work within the UK.
Can self-employed individuals on a tier two visa get a mortgage in the UK?
Interesting question – because you can’t be self-employed on a tier two visa. It requires an employer sponsor. If you’re here on a tier two visa you will be employed by a company.
The tier two visa also requires you to reapply if you are changing employers, as well. That new employer is responsible for your visa. On a tier two visa you do not have access to public funds – you wouldn’t be entitled to any benefits as you are working for the specific company, employed on PAYE. So you won’t be self-employed on a tier two visa.
Is it necessary to have a certain amount for a deposit when applying for a tier two visa mortgage?
A lot of this is going to come down to how long you’ve been in the UK for. Some people on tier two visas have been here for many years and have just renewed the visa. Many of them get to the five year plus point and apply for indefinite leave to remain.
Some lenders will dictate that you need to have a 25% deposit as a foreign national, and depending on how long you have lived in the UK, that may reduce. Other lenders may accept a 90% or 95% Loan to Value – but again, this is fluid and changes very frequently based on lenders’ appetite and risk attitudes.
One key bit of criteria is that a 25% deposit will open up most lenders. But lenders at the specific time may accept less. Again, that may also be linked to how long you have been in the UK. If you’ve only been here for six months you may fall back into needing a 25% deposit. But if you’ve been here for years, possibly you could have a much lower deposit.
To get a definitive answer for your own situation, speak to a mortgage broker and see how the land lies at that specific time.
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What are the minimum and maximum amounts one can borrow for a mortgage on a tier two visa?
Minimums and maximums are going to be based on two things. The first is whether there will be Loan to Value limits placed on the application – of potentially 75%, 85% 90% etc., depending on your individual circumstances.
Second, it will be the usual affordability calculations. They’re no different for people on tier two visas. The calculations will be based on the lender’s affordability models and you will be loaned up to the maximum allowed by that calculator at the relevant Loan to Value.
How long does the tier two visa mortgage process take from application to approval?
It won’t take any longer than an ordinary mortgage application. It could be as quick as a week to get a mortgage offer – or it could take four to six weeks. It will really depend on how complex the overall situation is,how your income is made up and any due diligence that’s required on your deposit.
That can be quite critical, depending on what country that deposit is held in if it’s not the UK. If the country is sanctioned by the UK , for example, it will not be an acceptable source of deposit. You can check sanction lists online.
Sometimes there may be a few more questions if you’re towards the end of your tier two visa and you’re applying to have it renewed. But generally it doesn’t take any longer than an ordinary mortgage application.
Are there any restrictions on the type of property that can be purchased with a tier two visa?
No, there’s no no restrictions on the property based on you having a tier two visa. The only restrictions will be those applied by lenders. Some may require a larger deposit for a new build flat, for example, or they won’t lend on an apartment that has a really short lease.
That’s not linked to the visa – it’s purely the property criteria of the individual lender.
What are the interest rates and fees associated with getting a mortgage with a tier two visa?
The interest rates will depend on what’s available at the time, the deposit and the type of product you’re applying for: a two, three or five year fix for example, or a tracker rate. So we can’t really answer that specifically.
In terms of the fees associated with tier two visa, there’s likely to be some form of broker fee. Our fee is typically £495 payable on application. Depending on your situation, you’re potentially going to have a valuation or survey fee on the property you’re looking to buy.
The product you go for may well have fees as well, such as a product fee or an application fee. They don’t apply in every case, and sometimes none will apply – it will depend on the product.
Then of course you will have legal fees which will be quoted by the solicitors acting for you. We can point you in the right direction of some decent solicitors as needed.
None of these fees are specific to tier two visa mortgage applications, but they will be specific to the type of mortgage you apply for, be it fixed or variable.
Are there any additional costs that need to be considered when applying for a mortgage with a tier two visa?
Certain things may well apply to any foreign national, depending on how they are here in the UK. There may be additional legal fees based on due diligence around your sources of funds.
Mortgage brokers, banks and legal professionals have an obligation under money laundering and terrorist financing acts to ensure that the genuine and original source of the funds is established and that source is legitimate.
That’s fairly simple when you’re within the UK. Your money’s been typically either gifted to you from a parent in the UK within the banking system, or, you’ve saved it yourself over a period of time from your salary. In these cases it’s simple to establish the origin of the funds.
When those funds are held in foreign bank accounts and transferred to the UK, there may well be additional checks that legal teams may charge you for. You need to make sure that when you’re applying for a mortgage with a deposit from a foreign bank account, that’s the first thing you discuss with your mortgage broker.
We can check that it fits within the criteria of lenders. Some lenders won’t accept a gifted deposit from a foreign source – or even your own savings from a foreign source, because they don’t want to have to do the due diligence required. The costs involved at their end can’t be passed on to you. So it’s very important to have that conversation to start with – but these are the only additional costs you might face compared to a British national.
Is there anything else we need to know about a tier two visa mortgage?
This can all be quite complex when you’re a foreign national. You’ve got your visa situation, there will be a certain amount of time left on it, there might well be a renewal in process. You may have a foreign deposit.
I would recommend that anyone in this situation contacts a mortgage broker with experience in dealing with foreign nationals. We understand what a tier two visa is and the process.
In our experience, we tend to deal with people the second time around when they’ve tried to get a mortgage themselves and failed. They tend to not pitch the application in a suitable way or to a suitable lender. Taking professional advice is definitely the way forward, if the application is complex – as it may well be.
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