Contractor Mortgages for Immigrants Contractor Mortgages for Tier 1, Tier 2 & HSMP contractors.
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.
The problem is, most can’t because High Street lenders won’t grant them mortgages 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) can’t 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, the need to find mortgages for anyone born outside the UK becomes more pressing every year.
In the past, lenders have issued specific guidelines for lending to immigrant contract workers. To a certain degree, that’s changed in favour of foreign nationals and non-EEA foreigners.
Some banks and building societies have recognised the growing need and have begun to move with this trend. That fact may not be clear to you if you’ve applied for a mortgage in your local branch.
In the UK, contractors need to approach mortgage lenders in a specific manner. So don’t think you’re on an impossible journey if a High Street bank has rejected your application.
Each bank has its own guidelines 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 apply to all industries.
To complicate matters, the least amount a lender will consider fluctuates from bank to bank.
As such, immigrant contractors continue to struggle to secure mortgage finance when they’re on a HSMP or hold a Tier 1, Tier 2 or Tier 3 VISA.
But again, each lender has its own set of criteria to judge what contractual conditions it deems acceptable for each level.
For example, say you’re a contractor without indefinite leave to remain. You apply for a mortgage and they turn you down. It’s natural to think that the lender has refused you funds on the sole basis of your immigrant status.
While that may be true with some, contractors born in the UK also 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 the way contracting works.
What do lenders want from contractors working on HSMP?
There’s no set rule that governs all banks. As such, lenders assess foreign nationals by their own criteria. As long as those rules follow lending guidelines, 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 been working in the UK for long, with those lenders their journey ends here.
But some banks 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.
We’ve worked with underwriters so that they understand how much of a mortgage loan contractors can afford. Some lenders are more open to this concept than others.
During this process, 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?
We’ve helped lenders to realise that their normal affordability calculation doesn’t work for contractors. Even moreso for those who operate in a tax-efficient way through their own limited company.
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 has also affected many lenders’ willingness to lend to all but the lowest risk applicants.
In contrast to your local branch, we can find the best mortgage for you from a wide variety of lenders. They will base how much you can borrow on a generous multiple of your hourly or daily contract rate.
The calculation bases your affordability on an “annualised” contract rate. We don’t ask for payslips or accounts. 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 approach each case on its merits and only advise mortgages that your circumstances are likely to be able to secure.
- 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. 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 even worse as repeat credit searches leave a ‘footprint’ and damage a credit rating.
How much can contractors borrow?
To get an idea of how much you can borrow based on your daily contract rate, you can enter your details into our mortgage calculator.
For a more accurate figure, our team of specialist advisors is ready to discuss your requirements.
We can give you all the general advice in the world. But it will do you no good unless we know 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 back with the most appropriate offers.
One point of contact throughout your application
For your peace of mind, your contact will be available to you throughout the process, should you need them. As an immigrant, you may have lots of questions yourself.
By having a familiar voice to talk to, 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.
Contractor Mortgage Calculator
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