A guide to Self-Employed Mortgages for Non-UK Nationals
If you run your own business in the UK but aren’t a UK citizen, getting a mortgage may prove tricky. It shouldn’t. You contribute to the economy as much as any self-employed worker born here.
But, when you walk into a High Street lender’s branch, you might feel as if you already have three strikes against you:
- Strike One: You don’t have a guaranteed monthly payslip
- Strike Two: Your income can fluctuate if you’re not on a fixed contract
- Strike Three: You don’t have permanent residency because you’re here on a visa
And, you guessed it: three strikes and you’re out!
Traditional high-street lenders’ affordability calculations historically haven’t performed well for this combination. That’s because their criteria are rigid and inflexible, and often favour PAYE employees.
However, all is not lost. Getting a self-employed mortgage, even if you’re in the UK on a visa, is absolutely possible. You just need to know how the system works for people in your specific situation. That’s where a broker like us comes in.
1. The Basics: Can I get a mortgage on a Visa?
Yes, but what you first must realise is that you are what a lender would class as a ‘complex case’. That, in itself, puts you in a higher-risk category than mainstream borrowers. And it’s because of this higher risk that many traditional lenders won’t even consider your application.
Their disinterest boils down to two things:
- Lenders view you as “higher risk” because, theoretically, your visa could expire, forcing you to leave the country and be unable to repay your mortgage, and
- Because you’re self-employed, their perception of your income also invites higher risk
That’s why we have to look at lenders who deal specifically in self-employed mortgage applications.
Within our network, we have mortgage lenders who manually underwrite applications. They understand self-employment. They understand people working in the UK on visas.
But there are fewer of them willing to go the extra mile than there are traditional lenders. And, because every detail is taken into account, the process may take a little longer.
The advantage is that the underwriter will assess your application on its true merit. This beats walking into a high street branch and getting rejected by a computer without a fair hearing.
2. The “Tier 2” (Skilled Worker) Visa Explained
Often, when discussing mortgages for foreign nationals, you’ll hear the term “Tier 2 Visas.” Here’s an overview of them:
What it is:
A Tier 2 Visa is the previous name for the Skilled Worker Visa. Foreign nationals are awarded them if they’re a skilled professional sponsored by a UK employer.
Is it really for self-employed people, then?
Typically, a Skilled Worker Visa binds you to an employer. Lenders will look into your relationship with your sponsor if you’re working as a contractor or are undertaking supplementary freelance work. Before they approve your mortgage, they’ll ensure your income complies with the terms of your visa.
Worth mentioning:
If you are fully self-employed and don’t enjoy an employer’s sponsorship, you might be working in the UK on a Global Talent, Innovator, or Family visa. Even if that’s the case, the following mortgage guidance still applies to you.
3. The “Three Golden Rules” for Foreign Nationals’ Mortgages
Your role aside, lenders consider three specific factors when appraising foreign nationals for mortgages:
A. The time you’ve spent in the UK
Most lenders want you to have lived in the UK for at least 12 months before you apply. But, as you’re applying for a self-employed mortgage, that would be the minimum work history anyway.
If you have been here less than a year, the chances of getting any mortgage are slim. If you have exceptional circumstances, there may be an outside chance. But you’d have to run your exact circumstances by a specialist broker first.
Our advisors can tell you how good your chances are after a brief initial consultation. These are free. So, if you think you’ve got a good case, you can speak to us in total confidence. If there’s a route to homeownership for you, we’ll find it.
B. The time remaining on your current visa
How much time you have left on your visa is another key factor underwriters look for. There’s no point approving your mortgage if you might have to return to your native country. Here’s a lender’s scale to help you determine your chances of mortgage success:
- Ideal: You’re a foreign national, but have indefinite leave to remain (permanent residency)
- Good: Your visa has more than two years left to run
- Difficult: Your visa has less than six months left to run
C. Your Deposit
No matter what type of borrower you are, the bigger the deposit you can put down, the better. But because you’re a “foreign national,” lenders might require a larger deposit than they would for a UK citizen.
In terms of numbers, expect to need a deposit between 10% and 25% of the property price. This will ultimately depend on the lender, the home’s price, and your work and credit histories.
4. How different Visas affect your chances
Not all visas are equal in a lender’s eyes. Here’s the weight a mortgage lender typically applies to each type of UK visa:
Skilled Worker (Tier 2)
Lenders generally accept Tier 2 visa holders, provided you have 1–2 years remaining on the visa. It’s best to check a specific lender’s policy with your broker as early as you can in the process.
Spousal/Family Visa
Most lenders will accept your application if you’re married to a UK national or a foreign national with permanent residence. This is often the path of least resistance. This gives you the opportunity to apply for a Joint Mortgage. Your partner’s residency status will help appease the underwriter assessing your application.
EU Citizens
Most lenders with foreign national policies will treat you as they would a UK national if you’ve achieved “Settled Status.” Again, inform your broker of your status at the beginning of the application process. This will help prevent unnecessary barriers that could slow down your application further down the line.
5. The “Double Jeopardy” Factor (Visa + Self-Employment)
This is the most important part for you to communicate with your broker. They will tell you how best to navigate the combined risk of self-employment and not being a UK citizen:
From the lender’s perspective
A permanent PAYE employee on a visa has a stable job. Stable income. As a self-employed person, you may have fluctuating income. Even if you’re a contractor, your contracts may only be short-term.
You’ll need to make a case that your business and income are stable. The industry in which you work will also need to be, to a certain extent, future-proof.
Additional documentation you’ll need
You’ll need to prove your right to live in the UK using your passport/BRP share code. Plus, you’ll need evidence of your business’s stability. Depending on the lender, you may need to provide 1–2 years of tax returns, signed-off accounts, and tax-year overviews.
6. Why you need a Broker
The traditional, larger lenders have rigid “tick-box” criteria that mortgage applicants must meet. By ticking “No” to UK citizenship and “Yes” to self-employment, their computer will often reject you before your application gets into a human’s hands.
I can’t speak for other brokers, but we can give you:
Access to specialist underwriters
For over 20 years, we’ve worked with many specialist lenders. Our network is solid and responsive. We can take one look at your application and automatically narrow your options, saving you time, heartache, and often money.
The correct interpretation of your affordability
I don’t mean we have to literally translate your application. Rather, we can explain your business income to underwriters in a way they understand. This way, we highlight your affordability in its best light.
This goes beyond SA302s and bank statements. General in-branch staff and call centre agents wouldn’t be able to process this type of information. That’s why a specialist broker with underwriter access is crucial.
Visa knowledge: what type of borrowing your status can access
We know which lenders accept applicants based on the type of visa they have. We can either immediately recommend or reject potential lenders based on your documentation.
The Bottom Line:
Being a non-UK national running your own business takes a huge amount of skill and nerve. It demonstrates drive and ambition, and a commitment to making the best life you can for you and your family.
There are lenders who want to lend to people with attitudes like yours. We’re here to help you find them and help you set up the home your hard work deserves.
Share: