Mortgage - will I have trouble getting it?

We are looking to apply for a mortgage in September.  By that time we will have 3% deposit and I will have three years worth of perfect credit in the UK.  Pulled our credit reports the other day and we both scored good...I would have scored excellent except for the fact im not on the electoral roll, and Ive since added a statement to my report explaining why Im not on it.

I came to the UK on a work permit in May 2003.  Last year they extended my work permit by ten more years. I married my british hubby in May 2006.  I decided not to go for ILR based on the marriage because its cheaper and quicker to get it based on 5 years on my work permit which is next May (2008).

Now Im wondering if this is going to pose a problem on the mortgage application. I have never had problems opening accounts or getting credit in this country and I have many open accounts and loans in good standing.  Do you think not having the ILR will be a problem? 

We are in the process of getting a mortgage ourselves.  When it comes to items that they know they can eventually get back and get their money out of, they will gladly accept your interest payments.

They are going to be far more interested in your employment history, your credit rating and your work contract then your immigration status.

The big things to think of though are Stamp Duty...  We are finding whatever money we have saved up, considering stamp duty, legal feels, assessment fees, etc etc etc is often 3-4% of the house, so we are having to finance the whole thing without a down payment, which isn't ideal, but do-able.

Yeah a lot of friends  had to do 100% mortgages for that same reason.  We are at my in laws which is not ideal so might even do this ourselves!!!  So you are getting 100% mortgage? Was the application tough? We have both been in our jobs for 7years in management positions and have solid contracts and credit history...we just have a big loan right now we are trying to pay down before we apply for a mortgage.....what interest rate do they offer for 100%?  How much do you actually end up paying in fees and solicitors etc?

I just spoke to a mortgage broker and he said the application will never be accepted for a 100% mortgage unless I had a stamp in my passport saying I was a permanent resident.

FLR apparently doesnt even count.

Has to be permanent.

Hi Moggy,

For 100% mortgages you'll be paying a higher rate of interest than compared to a mortgage with some money down. You'll really be needing to shop around and try to get the absolutley best deal as possible in terms of interest rates. Currently interest rates stand at 5.25% and are widely expected to hit 6% by the end of the year. I have a tracker +1% so I'll be paying 7% and I can only assume 100% mortgages will be something very similar, and from a quick search a Natwest 100% is asking for 7.6% and for a quick breakdown look here http://www.yourmortgage.co.uk/01_ftb/100percent.htm

So an element of caution in your case would be very wise indeed. As for the other elements, solicitors fee's, stamp duty, survey's etc all can and do vary but a good overall persepctive is the 3-5% of the purchase price needing to go to these elements.

Whilst I understand many posters on UKY wanting to buy a place, to then have your choices limited to the more expensive options is almost a punch in the guts and even more so now with the state of the economy/interest rates/inflation/cost of living increases - it could be in your best interests to rent rather than to buy, but obviously, that boils down to individual elements and scenario's.

Good luck !

DtM west London & Slough UK

hi Moggy,

Yes that makes sense, 100% mortgages are for UK citizens and/or permanent individuals. That then currently puts you in the 'external' sector, meaning if you want to buy in the UK you will need to put down at least a 20% deposit. If you can put down a 30% deposit, they won't even ask you to prove income or jobs or references etc.

So it looks like your May 2008 timeframe is the earliest at which point you consider buying here. However, it seems there are other options from what you've said, your Brit husband could buy - from that, another set of things to watch out for apply, i.e try not to be tempted by mortgages offering 4,5,6 times multiples of income! they initially sound good in terms oh now I can borrow an extra 10,20,30,40 grand or so, and then when you look at the repayment amounts you can come back to earth with a bump!

There may be other loopholes or routes to explore as well, so speak to various lenders directly as well as different mortgage brokers to get more of an accurate picture for your situation.

Good luck!
DtM! West London & Slough UK!

30% deposit - you are clearly joking.....

I just spoke to halifax and they said 3% down and since hubby is a citizen it wont be a problem.  Lloyds said 5% down and the underwriters would have to see how strong the rest of the application was.  Maybe the magic mortgages guy was just having a bad day.

That being said....perhaps it is best to wait till I have ILR anyway.  Does anyone know how quickly after applying for ILR that you actually get it?  And how far in advance I can apply for it? 

I can get FLR based on the marriage now....but does that even count in the eyes of mortgage people??

I will admit, we are a bit of the exception to the rule, because we are going for a 100% mortgage of a large amount (it is irregular agreed) but my partner is a UK citizen with perfect credit.  Also combined our salaries are rather stupidly high (in excess of £120K not counting bonuses).  We have no other debt to speak of.

Basically with morgtages, where there is a will there is a way.  While I can understand about the FLR when you just here on a Work Permit, I still think there is a will or a way.

We don't have the final numbers yet (we are still trying to find the property and the mortgage broker didn't show up to our meeting last weekend because he was sick to start going over all the details).  But when he saw how much we made, he basically shut up.

hiya,

Yes I agree with you on the 'wheres theres a will there's a way' thing - my cousins (who I've mentioned before on the medical section of the board) who are here on work permits only, have 2 mortgages and as per anything in life, dependant on how much money there is, anything can get done.

Moggy - Nope I'm not joking! - 'generally' speaking, if you're a non UK citizen, to get a mortgage the 'normal way' (putting a deposit down) most lenders will offer upto around 80-85% (if lucky) of the value of the property. they will then assess you and the situation you are in and usually something will and can be arranged (just like my cousins did) Kitsonk's scenario is similar in that respect too and more than likely, the lenders will give them a mortgage (especially after seeing potentially £120 grand being earned, you can safely assume the banks will be rubbing their hands together with glee at this prospect!)

What needs to be remembered here is that the more money you have or will have (earnings) the easier it will be to get a mortgage. So in order to get a 100% mortgage and to get the banks to bend the rules, you'd generally need to be earning very high salaries.

If you don't want to be assessed you can still get a mortgage here, by putting a large deposit down, usually 20,25 or 30% - the banks won't even ask what you do for a living! and the dosh will be in your account (or with the solicitors/sellers bank) very quickly!

Going from what my cousins told me, they were in the UK for around 1.5 years before deciding to buy, they are not UK citizens and haven't applied for citizenship or ILR etc. From the time they mentioned they wanted to buy and moving in was around 2 months (their earnings is also extremely high but a good £30 grand less than Kitsonks!) , so I'd estimate for you provided you have a place in mind, it probably would be quicker.

In both your's and kitsonk's scenario, you both have partners who ARE UK citizens, which to the lenders 'feels better' !  Moggy, I think you'll need to find out about if the ILR thing makes a difference to the application or not and of course, see how much dosh you have or will earn which will help sway the decision your way!

Disclaimer - I'm extremely knackered today after having the last 4 days being an exhibitor and a Trade only show - my brain is a bit frazzled! - if something in what I've said doesn't make sense, you now know why! - Im only going on the rules that I've had explained to me from various lenders and mortgage advisors both in the UK and USA/Canada & proeprty magazines.

Cheers! and Good luck to you Moggy & Kitsonk!  DtM West London & Slough UK!

I guess I will see what happens when its closer to the time......its so annoying that there is this much red tape for honest people who earn a living and want to buy and pay for their own property!!!!!!!!!!!!!!

We earn good salaries and have perfect credit...our bank takes 3% down. If its not good enough by the time we apply then we will have to rent for another year. Not ideal but hey - maybe the housing market will suddenly take turn and it will be better in the long run anyway. Sigh....................

for what it's worth, here's my story:

i've been in the uk since 05/06. i'm on ILR with a spousal visa. i started my permanent, full-time salaried position in october of 2006.

we just bought our first house, with a 100% mortgage in both our names, fixed at 5.89% for five years. we're just waiting for our completion date now.

we did this through a mortgage broker at the estate agent which was selling the house. he's been especially helpful--neither of us had any clue about the property world going into this. and, as a side note, when we first approached this guy about applying for a mortgage, he had no clue how it would work with my resident status--he thought perhaps that would throw a big spanner in the works. but he did his research & we did ours, and it all went through just fine.

it can be done. talk to a mortgage broker. get some books & read up on all of this--i bought 'buying a house on a budget for dummies' and that's been quite informative.

good luck!