Whilst there are considerable challenges and requirements for foreign nationals to receive mortgages and purchase properties in the UK, that doesn’t make it impossible. Let’s explore the ways for this to be achieved.
The eligibility of receiving a mortgage in the UK can often depend on one’s visa type, residency and deposit. In many cases, these deposits can be slightly higher than nationals, ranging from 15-25%.
Who qualifies as a foreign national?
By definition, a “foreign national” includes any individual who not holding a UK passport, which includes:
● Individuals not born in the UK, but are allowed to live here and hold permanent residency (leave to remain).
● Individuals who don’t live in the UK or simply don’t have the permission to live here indefinitely.
For those who fall under either category, don’t fret. You are still very much able to get a mortgage, so let’s explore what these are.
Necessary Documents for Securing a Mortgage
There are multiple items you’ll need when applying for a Foreign National Mortgage:
● Visa or residency permit
● Proof of income (via payslips or contracts)
● UK Credit report (if available)
● Proof of deposit
Foreign Nationals Lender Requirements for a Mortgage
For non-UK nationals, British lenders are more stricter – often due to a perceived risk – which includes but isn’t limited to:
● The length of one’s UK residency, where it is preferable that an individual has resided in the country for 6 months to 2 years.
● Holding a stable UK-based employment proliferates one’s eligibility.
● One’s credit history (more on this below)
It’s important to understand that lenders will consider more than just your credit history (which could be limited given the time of residency spent in the UK).
If this is the case, there are several ways in which you can improve your credit score:
Improving One’s Credit Score
1. Attaining a UK Credit Card which can be used for small purchases and paid off in full each month is beneficial.
2. Opening a UK Bank Account to maintain a positive balance and show consistent transactions.
3. It’s good to pay bills on time to ensure your name is present on a multitude of bills, and contracts.
4. Ensure that your credit card footprint is not excessive.
However, even with a low credit score there are a myriad of options such as speaking to specialist lenders who offer mortgages to those with limited or no UK credit history. Alternatively, you may be offered a mortgage if your deposit is set to a larger amount.
It is important to carefully consider not only your options, but the various factors that come into play when applying for a mortgage as a foreign national. Ensure that you speak to knowledgeable experts that can offer the adequate advice needed to put you one step forward into the UK’s property market.
