PROFESSIONAL CONTRACTOR MORTGAGE FOR FOREIGN NATIONAL

The Situation

We were approached by a new client who faced challenges securing a residential mortgage due to her status as a foreign national. Despite having resided in the UK for almost 10 years, she had not secured “Indefinite Leave to Remain” (ILR) status.

This restricted her available options so she approached us to see if we could help.

 

The Solution

We secured a mortgage offer from one of the largest high street lenders in the UK. The broker was able to negotiate a policy exception out with standard policy in relation to the applicant’s status as a fixed-term contractor.

The lender was also happy to offer 80% loan-to-value (LTV) without the applicant having ILR whereas most other lenders would only offer 75% LTV.

 

The Process

There were several obstacles to overcome before this deal could be secured. Firstly, the applicant was on a Skilled Worker Visa (Tier 2) but had not yet secured her permanent status by applying for Indefinite Leave to Remain. Most lenders offer up to 75% LTV for applicants on visas but the client had a 20% deposit meaning we had to source a lender who could offer 80% LTV.

Secondly, our client was employed by the NHS as a doctor but on a contractual basis meaning she would be subject to a lender’s individual contractual policy. This can often be more restrictive to the borrow when compared to those who are permanent employees.

Finally, the applicant required a generous income stretch of around 5X her annual income. When we combine this requirement with her status as contractor then your window of lenders is severely restricted leaving you with just a few options.

Fortunately, we were able to approach the development manager of a national high street lender and present the case with the aim of securing terms that would tick all the boxes for our client. Key to agreeing acceptable terms was securing a policy exception with regards to the client’s contract. We sought a letter from the NHS confirming the applicant’s contract would be renewed.

As a result, the underwriter was happy to bypass the contractor policy and instead, treated the applicant as a permanent employee. The result was that the applicant was able to borrow 12% more than they would have been able to as a contractor. This got us over the line and secured borrowing at 80% LTV.

The Outcome

The deal was secured on a five-year fixed rate which at time of application, was one of the cheapest deals in the marketplace. We could possibly have secured a “professional mortgage” with a more specialised lender but the interest rate would have been 2.50% more expensive.

While the deal did take a couple of weeks to arrange, we are delighted with the outcome and so is our client. We look forward to working together in the future.

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