Tier 2 Visa Mortgages Explained

If you have been working within the UK on a Tier 2 visa, you may have been considering your future including whether you would like to purchase a property.

In December 2020, the immigration system within the UK changed and Tier 2 visas were no longer available to new applications.

When a Tier 2 visa is nearing its expiration, a visa holder would need to apply for a skilled worker visa in order to extend their stay within the UK.

The new visa system is a points-based scheme that involves an applicant requiring 70 points to be eligible for a skilled worker visa.

This guide will explore the mortgages available to foreign nationals working in the UK under either a Tier 2 visa or a skilled working visa.

What are Tier 2 Visa or Skilled Worker Visa Mortgages?

A common misconception is that foreign nationals are unable to obtain a mortgage due to their visa status however this is not the case. Mortgage lenders will assess an application primarily on the usual credit checks and affordability criteria.

However, lenders will also be interested in the duration of time the applicant has resided within the UK and the amount of time remaining on their current visa.

Each lender’s criteria will vary however typically lenders would expect that mortgage applications will have been a resident within the UK a minimum of two years before making an application in order to build a credit profile within the UK.

Some lenders are even more strict and will require a three-year residency along with a UK bank and savings account, however in return, such lenders may offer more favourable terms.

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Can I Obtain a Tier 2 Visa or Skilled Worker Visa Mortgage with a Bad Credit History?

A history of bad credit may impact any mortgage application however the level of influence will depend on the severity of the financial difficulties.

History of County Court Judgments (CCJs), defaults, bankruptcy or Individual Voluntary Arrangements (IVAs) would represent a greater risk to a lender than a minor offence.

However, lenders would be interested in the duration of time that has passed since the bed credit matter was logged on an applicant’s credit history.

Although it would not be impossible to obtain a mortgage with a negative credit history, combining this factor with a visa-related status may inhibit your options.

In this scenario, it would be highly recommended that the applicant seeks independent financial advice ahead of making a mortgage application to ensure that all other personal circumstances are in the most positive position before approaching a lender.

A professional advisor can also advise which lenders would be most suitable, find the best financial product for the requirements and assess the likelihood of an application being accepted.

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Mortgage Lender’s Considerations When Assessing a Tier 2 Visa or Skilled Worker Visa Mortgage Application

As with a standard mortgage application, lenders will undertake an assessment process to review the entire personal and financial situation of the applicant(s) in order to make a decision upon lending.

Each lender will have their own criteria for reviewing a mortgage application including:

  • Age – Lenders will have a maximum age that they are prepared to lend to
  • Duration of residence within the UK – As discussed lenders will have a minimum requirement of how long an application should have lived within the UK prior to an application being made
  • Length of time at current address
  • Employment status and time with an employer
  • Number of dependants
  • Affordability – Lenders will each have their own affordability criteria which include reviewing the level of debts that an applicant has and availability of credit as well as monthly expenditure and levels of disposable income
  •  Credit Score & Credit History – A lender would review both an applicant’s current credit score as well as detailed credit history report including information on records of the previous borrowing such as loans, credit cards, household bills and will breakdown the success of regular payments as well as detailing any late or missed instalments or other matters.

Should there be any significant events on a credit score such as County Court Judgments (CCJs), defaults, bankruptcy or Individual Voluntary Arrangements (IVAs) depending on the circumstances, it may be advisable to wait until the events drop off a credit report after 6 years.

If you have a history of any such occurrences, it is highly recommended that advice is sought from either an independent financial advisor or mortgage broker ahead of making a mortgage application who can assess all of the factors involved and advise the likelihood of an application being accepted.

Foreign National Mortgages

Tier 2 visas or Skilled Worker Visas are not the only types of immigration statuses that could be acceptable for a mortgage in the UK. Other work permits or statuses may be considered as long as the applicant meets the following core criteria:

  • Resided within the UK for a minimum of 2 years
  • Have a permanent employment contract in place
  • Have an open UK bank account

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Can I use a Tier 2 Visa or Skilled Worker Visa Mortgage to Purchase a Buy-to-Let Property?

Investing in property to rent out is a popular choice for many however the criteria for Buy-to-Let Mortgages is fairly strict, often requiring higher levels of deposits as well as a business plan detailing the forecast cash flow indicating the potential rental income.

There are no restrictions for foreign nationals working in the UK under either a Tier 2 visa or a skilled working visa, obtaining a Buy-to-Let Mortgage as long as the criteria can be met.

As with other types of financial products, often the lending criteria will vary between lenders and therefore for an insight into the market conditions and typical lender acceptance, it is recommended that an appointment is made with a mortgage broker.

Tier 2 Visa Mortgages Summary

If you are a foreign national seeking to purchase a property within the UK, please do get in touch with our expert team of mortgage brokers. Our team have access to a wide range of lenders and mortgage products in order to find the right match for your personal circumstances.

Please feel free to get in touch with our friendly team of advisors to book an initial consultation to discuss the options available to you.

Call us today on 01925 906 210 or feel free to contact us. One of our advisors will be happy to talk through all of your options with you.

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