Migrated to the UK recently? Provided your visa is in order, your next step is probably putting your efforts into owning your home. In the UK, the most common way of purchasing a property is obviously through a mortgage. But as a new resident and a newcomer to the country, there are few things to consider.

This article looks at the possibilities of obtaining a mortgage in the UK as a recent arrival. Particularly the requirements, potential hurdles, and steps you can take to increase the chances of successfully purchasing a property of your own.

What’s the eligibility for mortgages for newly migrated foreigners

The good news is that new foreign nationals can obtain mortgages in the UK. There's no legal barrier based solely on your immigration status. However, lenders will have specific criteria to assess your application, focusing on your job stability, level of income and immigration status.

Here are some key factors that lenders typically consider:

Visa type:

The type of visa you hold plays an important role when applying for a mortgage. To make it a little easier to understand, let’s assume you are a skilled worker and have obtained Permanent Residency (PR) status. If you are a skilled worker with permanent residency, you are considered generally more favourable to mortgage lenders. The PR status is an accepted indicator of your capacity to live and work in the UK.

Length of residency:

Building a track record of financial strength in the UK helps with your application. If you have carried out notable transactions during your stay in the UK, such as purchasing a vehicle on a loan or lease and have been able to consistently meet the commitment of paying off the monthly instalments, this is a good indicator of your transactional commitment and strength. Most lenders prefer applicants who have been in the UK for at least two to three years.

Employment status:

Being in permanent, full-time employment with a steady income can be seen as a crucial deciding factor by the lender. Being employed is a better option rather than being self-employed. If you are self-employed, the lender may consider putting you through additional scrutiny in order to ensure that you have adequate income from your business venture that enables you to meet your monthly financial commitments.

Credit history:

Having a good credit history during your period in the UK, or a verifiable positive credit history from your home country, is a definite advantage when applying for a mortgage. A good credit score in the UK is a crucial advantage to getting your mortgage application passed.

Mortgage challenges faced by new foreign nationals

While obtaining a mortgage is achievable, here are some challenges you as a newly migrated foreign national might encounter.

Limited credit history:

Without a UK credit history, lenders may have difficulty assessing your creditworthiness. This could lead to your mortgage application being rejected.

Visa restrictions:

Although this article does not focus on visa matters, certain visas may have limitations on borrowing or property ownership. You could consider speaking to a migration professional for advice on your type of visa and any restrictions it may have.

Documentation requirements:

As a new foreign national,, you may find gathering the necessary documentation for a mortgage a bit hard. Understanding certain procedures and processes may come as a challenge to some.

Speak to a Mortgage Adviser for assistance with the documentation as well as how to proceed correctly regarding your mortgage application. At BVS Mortgages & Financial Services, our advisers are well experienced experts who can help you understand the intricacies involved with the  documentation required for a mortgage application.

Some tips you might find useful

Here are some tips to increase your chances of securing a mortgage successfully:

Building a credit history:

Open a bank account in the UK. Use a credit card responsibly. And pay bills on time to establish a positive credit record.

Making a larger deposit:

A bigger down payment on your mortgage reduces the loan amount and demonstrates your financial strength, making your application more attractive.

Choose the right mortgage product:

Speak to an experienced mortgage broker who can help you choose the most suitable mortgage solution as a newly migrated foreign national. Mortgage Advisers can help you find lenders offering products tailored to suit your circumstance.

Conclusion

Obtaining a mortgage as a foreign national in the UK requires some planning and preparation. By understanding the eligibility criteria, potential challenges, you can increase your chances of securing a mortgage by making informed decisions and avoiding complications.

After all, your dream of building a better life in the UK is about to get even better with you owning your very own home.

* Approved by the Openwork Partnership on 16 Jul 2024