Tier 2 Visa Mortgage
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Tier 2 Visa Mortgage
Graeme Hilley and Ross Bremner talk to us about a Tier Two visa mortgage.
What is a Tier Two visa?
We get a lot of enquiries in relation to this, and we assist a lot of clients on a Tier Two visa – or, as it’s more commonly called now, a skilled worker visa. A Tier Two visa is for individuals with a job offer who are coming over to work in the UK with an approved employer.
It simply gives them eligibility to work and reside in the UK for a specified period of time. There are lots of mortgage options available for clients on a Tier Two visa.
How do I qualify for a mortgage with a Tier Two visa in the UK?
We’ve got lots of options depending on the client’s circumstances. You typically need to have a 10% deposit to get a mortgage in the UK, plus you need to have at least one year’s UK address history.
Lenders have different criteria in terms of what they’ll let you borrow and the deposit you will need. For example, if you do have a Tier Two visa but you’ve got circa 25% deposit, you would be looking at standard mortgage products with most lenders.
The market in general has moved quite a bit on Tier Two visas and skilled worker visas. Lenders are flexible, but it’s really important that you speak to a mortgage broker because some niche lenders accommodate criteria for Tier Two visas that you wouldn’t find with mainstream lenders.
Can self-employed individuals get a mortgage on a Tier Two visa in the UK?
Yes, subject to the typical minimums you would always associate with self-employed criteria. You need to have been trading for a certain number of years and be able to evidence your income over that time.
It will also be driven by your deposit. If you’ve only got a 10% deposit, only a couple of lenders will support a Tier Two visa mortgage application. We’re then further restricted by their individual self-employed criteria.
So if you’re looking at a 10% deposit, you’re probably looking at at least being self-employed for a minimum of two years, with two years’ SA302s. If you’ve got a larger deposit, you may find a mortgage with one year of self-employment. It would just depend on minimum time in the UK.
There are options for clients who are self-employed who are looking for a Tier 2 visa, but we would need to speak to that client to get into the nuts and bolts of it. The criteria is complicated and that’s our job as a broker – to wade our way through that and find a lender that’s right for the client.
A lot of clients we speak to have been given the wrong answer. They may have gone to their own bank or seen one on the high street and been told they need a 25% deposit. That’s not true – so if you’re listening and this applies to you, get in touch and we can talk you through your options.
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Is it necessary to have a certain amount for a deposit when applying for a mortgage with a Tier Two visa?
The minimum is 10%, and that could come from savings, or as a gift from family members. Subject to lender criteria, it could also be a gift from a non-family member [information correct at time of recording, October 2024].
What is the minimum and maximum amount one can borrow on a mortgage with a Tier Two visa?
There’s no minimum. The lenders that are probably the most flexible with a Tier Two visa or skilled worker visa are Barclays and Skipton [podcast recorded in October 2024]. These are strong lenders in that space who are really good at supporting customers.
Your maximum borrowing will be 90% of the property’s value, as Ross said earlier on.
What documents are required for a Tier Two visa mortgage application?
You will need three months’ bank statements, three months pay slips and identification. The only difference between this profile of mortgage application and a standard profile of mortgage application is that we need to clarify the immigration status.
Through the government website, you should be able to obtain a share code, which would be accepted by any lender. They double check the status of the individual and otherwise it’s the same as a standard mortgage application.
How long does the Tier Two visa mortgage process take from application to approval?
Standard timescales apply, which are down to the individual lender. At the moment most lenders take between one and four working days from application to mortgage offer. Every case is unique, but it’s probably no more than a week.
Are there any restrictions on the type of property that can be purchased with a Tier Two visa?
No. It’s all as standard. It will align to the lender’s property criteria, but there are no restrictions, whether it’s a mortgage for someone with permanent right to reside in the UK or on a Tier Two visa.
What are the interest rates and fees associated with getting a mortgage on a Tier Two visa?
There’s no difference in terms of our fee as a broker. We charge the same for a client looking for a standard mortgage and somebody on Tier Two.
Lenders’ products aren’t differentiated either. There are no additional costs to consider for a Tier Two mortgage, so there’s nothing to worry about there.
What if I have bad credit? Can I still apply for a mortgage with a Tier Two visa?
Don’t let credit be a barrier to a conversation. Ultimately, it’s our job to sit down and work through your credit history and find out how that sits in relation to each lender’s criteria.
However, the number of lenders that do a Tier Two mortgage is a little more niche. If your credit history doesn’t fit with those lenders, we don’t have as many options on the table – especially if you just have a 10% deposit.
Like anything, if you’re putting down a bigger deposit, you’ll have more options. The only way to know the answer to that question is to pick up a phone, have a conversation, and we can work out the way forward from there.
How does remortgaging work for those on a Tier Two visa?
If we’re looking at remortgaging, it means we’ve already secured the mortgage in the first place. It’s then a case of looking at the options with that existing lender at the time of remortgaging, against options with alternative lenders.
We tend to find that once we get to a remortgage, there’s a good probability that the person has permanent right to reside. Then there are opportunities available with all the lenders.
But compared with a purchase mortgage transaction, there’s no real difference in terms of documents and lender criteria.
Can I get a Buy to Let mortgage on a Tier Two visa?
Yes. You can get a Buy to Let mortgage on a skilled worker visa. It’s important to know that there are stricter criteria for Buy to Let than residential mortgages. If you’re on a skilled worker visa, you really need specialist advice.
It’s really down to the nuts and bolts of the client’s circumstances. So speak to us and there might be an option available for you.
How can a mortgage broker help with a Tier Two visa mortgage?
In general, when you’re on a Tier Two visa or a skilled worker visa, lenders criteria vary. We’ve got access to all the lenders and it’s our role to navigate through that criteria.
We’re here to find the client the most suitable lender and proposition with the lowest rates. That’s how we can help as a mortgage broker.
And it’s not just about the mortgage. When you see a property you like, we can help you in the negotiations. If the property is in Scotland we can review the home report etc. We’re here to find the right solution for you, depending on your circumstances, income and deposit.
It’s really important that people get that level of support to navigate the journey – and we can do that.
THE INFORMATION CONTAINED WITHIN WAS CORRECT AT THE TIME OF PUBLICATION BUT IS SUBJECT TO CHANGE
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
MOST BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.