Clients
A married couple who had recently moved back to the UK to live full time. One applicant was British born. The other was a foreign national holding a visa to reside in the UK. Both were in full-time employment, and they were buying a family home.
Objective
To purchase at 90% loan to value, with one applicant on a visa and both carrying limited recent UK credit history.
Situation
The couple had owned and sold a home in Canada before returning. The sale gave them their deposit, and their history as homeowners was solid, but UK lenders give little weight to either when scoring an application.
Two features of the case drove the lender search.
Visa status came first. Most lenders apply restrictions to foreign national applicants, and the usual one is a ceiling on loan to value. At 90%, the couple sat above where a large part of the market would go, so a decline or a demand for a far bigger deposit was the likely outcome from a standard search.
Credit history came second. Several years abroad leaves almost nothing on a UK file, and a thin file scores badly regardless of how well someone has actually handled money. The couple had started rebuilding a UK profile before applying, which counted in their favour, though there was only so much history to show.
Challenges
- One applicant on a visa, with the loan to value restrictions that usually brings
- A 90% loan to value requirement, well above the typical foreign national cap
- Limited recent UK credit history after a long period living abroad
- Both applicants recently returned and newly in UK employment
What We Did
What changed the case was the joint application, with a British national named first.
A number of lenders drop their foreign national restrictions entirely in that situation. The visa no longer caps the terms on offer, and the file is underwritten in much the same way as any other joint residential case. Where both applicants are non-UK nationals, or where income is paid overseas, the case sits with our sister brand Expat Mortgages UK instead.
Some of those same lenders take a similar view on credit, accepting a thin or low-scoring file on one applicant where the other scores strongly. The rebuilding work helped, but it was the make-up of the pair that made the application viable. Understanding why mortgages get declined before submitting matters far more on a case like this than it does on a straightforward file.
The remaining task was finding which lender held both positions and would still go to 90%. Both applicants were newly in UK employment, so how lenders check income was the other point to settle before the application went in.
Solution
We placed the case with a lender accepting the foreign national applicant without loan to value restriction on the basis of the joint British application, at the 90% the clients needed.
Outcome
A formal mortgage offer issued within two weeks of the full application being submitted.
Conclusion
Foreign national status tends to get discussed as a label attached to a person. Lenders attach it to an application, and a mixed British and foreign national couple gets read very differently from a sole foreign national applicant. That distinction was worth roughly 15% of the purchase price in deposit for these clients.
Frequently Asked Questions
Can you get a mortgage if one applicant is a foreign national on a visa?
Yes, and a joint application with a British applicant substantially widens the options. Several lenders remove their usual foreign national restrictions where the first applicant is a British national, which affects both the loan to value available and the lender choice.
What loan to value can a foreign national borrow at?
Caps of 75% or lower are common where the applicant is a foreign national applying alone, so a deposit of 25% or more is often required. On a joint application with a British national, some lenders apply no cap at all and will go to 90%.
How do lenders view a thin credit file after living abroad?
A short UK credit history scores poorly even where nothing has ever been missed. Some lenders will work with a weak file on one applicant where the other scores strongly, and getting onto the electoral roll before applying is worth doing early.
How soon after returning to the UK can you apply for a mortgage?
Six months of UK employment is enough for some lenders. Others want a longer run, and requirements shift again depending on visa status and how much UK address history the applicant can evidence.
Final Thoughts
Coming back to the UK after years overseas leaves applicants in an awkward spot: financially established, but new to the system doing the assessing. How a lender reads a mixed-nationality couple decides most of these cases, and the range of views across the market is wide enough to check before accepting that a bigger deposit is the only route.
UK Mortgage Broker is a whole-of-market broker, directly authorised and regulated by the Financial Conduct Authority. Circumstances vary and the result here reflects these clients alone. It is not an indication of terms available to others. Your home may be repossessed if you do not keep up repayments on your mortgage.
Call 01628 969 500 or email info@uk-mortgagebroker.co.uk to speak with a qualified adviser.
Related Pages
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- Residential Mortgages – Purchases and remortgages for a home you live in.
- Can I Get a Mortgage – What lenders check on income, deposit and credit before approving an application.
- How Your Credit Score Affects Your Mortgage Application – Why a thin file scores badly and what improves it.
- Documents You Need for a Mortgage Application – Evidence requirements, including residency and address history.
- Mortgage Rates UK – How deposit size and applicant profile affect the rate offered.
- Expat and Foreign National Mortgages – Specialist lending for applicants living or earning overseas, through our sister brand.