Essential Requirements:
Visa and Presence: You must hold a valid Visa and be physically present in the UK at the time of your mortgage application. From there, each lender will have their own criteria based on your unique situation, income, and affordability.
Guarding Your Credit Score
As a foreign national, maintaining a good credit score is crucial. A poor credit score can make obtaining a mortgage nigh on impossible. Ensure you pay all your bills and financial agreements on time. For more guidance, refer to our Credit Issues page.
Loan to Value (LTV) Ratios
Loan to Value, or LTV, is the ratio (as a percentage) of what you borrow against how much you pay as a deposit when purchasing a property.
For Foreign Nationals: The standard is 75% LTV until you have two years of UK credit history. After two years, you can go up to 90% LTV. However, you can still achieve up to 90% LTV without two years of UK history by using overseas credit data, provided you’re from one of these magical lands:
- Australia
- Austria
- Canada
- Dominican Republic
- Philippines
- Germany
- India
- Kenya
- Mexico
- South Korea
- Spain
- Switzerland
- United States
How large a Mortgage can I get?
Lenders will access your Affordability when considering the maximum size of your mortgage. They need to ensure that borrowers are only approved for mortgages that they can afford to repay.
There are various accessing factors, but the affordability multiplier is normally around 4.5x your annual gross income, sometimes this can be higher for larger incomes.
High-Income Earners
If you earn over £75,000 per year, your path to a mortgage becomes much smoother, especially if you lack two years of UK credit history. You’ll have access to more mainstream lenders with lower interest rates.
Income Proof: Prepare to provide at least three months’ payslips to evidence your income.
Applying for a Joint Mortgage
If you’re applying for a joint mortgage with a UK national or someone with Indefinite Leave to Remain (ILR):
- You can combine incomes, potentially securing a higher mortgage amount.
- More mortgage lender options become available. Some lenders prefer not to consider sole foreign national applicants.
- You can go up to 95% Loan to Value.
Gifted Deposits from Overseas
Some lenders may consider gifted deposits from overseas sources. Each lender has its own criteria that is subject to country, and currency restrictions.
You will need to provide documentation showing the source of the deposit. Generally, lenders only accept gifted deposits from immediate family (mum, dad, etc.). All gifted deposits will be subject to Anti-Money Laundering (AML) checks.
Embark on your mortgage journey with confidence, armed with this magical knowledge. Whether you’re new to the UK or have been here for a while, there’s a pathway to securing your dream home. May your financial future be as bright as a thousand stars!
For more personalised advice and to discover which options best suit your needs, feel free to contact us. Your enchanted path to homeownership awaits!
