Mortgages for Foreign Nationals

As a non-UK citizen working as a contractor in the UK, you may decide you want to live here long term. Many migrant workers coming to the UK would love to stay after their contract’s ran its course.

But most can’t because High Street lenders won’t give them a mortgage due to their status.

What we don’t want is for you to get confused over which status is holding you back. It might not be your foreign national status that’s the problem, here. Let’s explain.

Why contractors (not just immigrants) struggle to get High Street mortgages

We’re an independent mortgage broker that specialises in securing finance for contractors. In truth, UK residents form the majority of our client base.

But, as global barriers fall, that will change. The need to find mortgages for anyone born outside the UK becomes more pressing every year.

To date, lenders have issued specific guidelines for lending to immigrant contract workers. To a certain degree, that’s changing in favour of foreign nationals and non-EEA foreigners.

Some banks and building societies have recognised this growing need. They’ve even begun to move with this trend. You may not think so, though, if you’ve applied for a mortgage in your local branch. We know why.

Not all in-branch advisors understand contract income

In the UK, contractors need to approach mortgage lenders in a specific manner. You first need to find a contractor-savvy advisor or broker. They then have to be able to translate your income to their underwriters.

The sad truth is, contracting remains a specialist niche. A typical High Street advisor may not understand the way you work. They may understand your payment structure — a limited company — even less.

So please don’t think your journey’s over if a High Street bank has rejected your application.

Each lender has its own guidelines and policies for immigrant lending

Mortgage finance is available to immigrant contractors, irrespective of their niche!

Yes, there are minimum earnings thresholds you must meet. But these limitations apply to all industries.

To complicate matters, there’s no overarching policy for income thresholds. The least amount of income a lender will consider fluctuates from bank to bank.

This can make mortgages difficult to secure for immigrant contractors on the High Street.

Again, each lender has its own set of lending criteria. Each will judge what contractual conditions it accepts for each level of work permit.

For example, say you’re a contractor without indefinite leave to remain. You apply for a mortgage, but they turn you down.

It would be natural to think that the lender has rejected you because of your immigrant status. While that may be true with some, even contractors born in the UK still struggle to get mortgages.

The issue isn’t always that you’re a foreign national. In-branch staff may have turned you down because they don’t understand how contracting works.

What do lenders want from contractors working on HSMP?

There are no set rules on immigrant mortgage lending that governs all lenders. As such, they can assess foreign nationals by their own criteria.

Yes, their own policies must adhere to general responsible lending guidelines. But as long as they do, the Financial Conduct Authority doesn’t intervene.

Most UK lenders won’t entertain an immigrant contractor’s mortgage application unless they have ILTR. Either that, or permanent residency may also help your cause.

For contractors who’ve not worked in the UK for long, their journey with those lenders ends here. But some will make an exception. Here are four instances whereby select lenders will consider your application:

• you’ve been working in the UK for more than a year and have a good credit score;
• you have at least two and a half years remaining on your existing VISA;
• you have 25% deposit to “put down” on the home you’re hoping to buy;
• and/or you’ve been living and working in the UK for at least 3 years.

If you meet any of those criteria, we can help you.

Our special relationship with underwriters is the key

We don’t deal with in-branch advisors; we work with underwriters. Our underwriters now understand the amount of mortgage finance our contractors can afford.

True. Some lenders are more open to contract-based underwriting than others.

But over time, we’ve developed many exceptional relationships with underwriting teams. What they all insist upon is receiving applications in a specific format.

We can package your application to their strict specifications. This saves you the time and hassle of trying to find these lenders online or on foot.

Also, we know how best to showcase your earnings to represent your true affordability. It’s this inability to see how much you’re worth that fails in-branch staff on the High Street.

Once we’ve done our part, we’ll pass it on to the senior underwriters. They, in turn, can then process your application in an efficient, timely manner.

Can foreign nationals get mortgages based on their contract rate alone?

Most contractors operate in a tax-efficient way through their own limited company. We’ve helped lenders realise that their normal affordability calculation doesn’t work for this model.

On the High Street, advisors often ask for three years’ worth of accounts. For most foreign nationals, this is a huge barrier to overcome.

The credit crunch also affected lenders’ willingness to lend. At one point, only the lowest-risk applicants could get a mortgage, even employees. Some lenders still take that outward-facing stance today.

In contrast to your local branch, we can find the best mortgage for you. We use a wide variety of contractor-friendly lenders from the whole of the market.

They will base how much you can borrow on a generous multiple of your hourly or daily contract rate. That calculation bases your affordability on an “annualised” contract rate.

We don’t ask for payslips or accounts. Instead, your contract, bank statements, CV and official ID usually suffice.

Why you need a trustworthy specialist mortgage broker

Our mortgage specialists have vast experience in securing bespoke terms for immigrant contractors. We show no bias and approach each case on its merits.

We’ll only ever offer mortgages that your circumstances are likely to be able to secure. This means:

• you can get access to mortgages with little deposit;
• bespoke lending criteria makes the whole process much quicker;
• lenders can approve your mortgage application within days of your first contract.

For your peace of mind, we only work with reputable lenders. They must have proven results, ensuring that purchases they’ve handled complete to our satisfaction.

This is an important point, especially if you’ve not been in the UK for long!

Choose your mortgage broker, lender or advisor with care

There are many lenders, especially online, who say that they’re eager to lend you the money to buy your home. They will give you a “decision in principle” in the blink of an eye. But this is not the same as having an underwriter approve your mortgage application.

The problem occurs when the application gets to the underwriter for approval. Only then will the member of staff realise their error and begin to back track.

They tell you that they’re not comfortable with your immigrant contractor status. While this may only be true in part, it still puts your house purchase in real jeopardy.

By this time, you may already have a financial and emotional commitment to buying the home. That they may not be able to finance your contractor mortgage after all can be devastating.

The scenario’s made worse still as repeat credit searches leave a ‘footprint’. Too many adverse searches can damage your credit rating.

How much can contractors borrow?

Our mortgage calculator will give you an idea of how much you can borrow:

This is a ballpark figure based on your daily contract rate.

For a more accurate figure, our team of specialist advisors is ready to discuss your requirements.

In a guide like this, we can give you all the general advice in the world. But we can’t advise anything without knowing your exact contracting and residential situation.

One call to us (or request a call back) and we’ll assign you a contact within our team. They’ll take your information, asking only what’s necessary to support an application.

They’ll then scour our network of contractor-friendly mortgage lenders. Once they have genuine opportunities for you, they’ll email you the most appropriate offers.

One point of contact throughout your application

As an immigrant, we expect you to have many questions yourself. So for your peace of mind, your contact will be available to you throughout the process.

We think giving you a familiar voice to talk to is important. You can be safe in the knowledge that we’re handling the process with diligence.

We’ll extend that level of professionalism until your contractor mortgage completes, and beyond. We’d love to help you get the keys to your new home, right here in the UK.