What is pre-settled status?
Pre-settled status is a type of immigration status granted to non-UK citizens who are living in the United Kingdom but have not yet acquired the status of settled status. It is part of the EU Settlement Scheme introduced by the UK government to protect the rights of the European Union (EU), European Economic Area (EEA), and Swiss citizens residing in the UK after the Brexit transition period.
Pre-settled status allows individuals to continue living and working in the UK for a limited period of time. It is usually granted to those who have been living in the UK for less than five years. Once an individual obtains pre-settled status, they can remain in the UK and enjoy the same rights as those with settled status, including access to healthcare, education, and public funds.
After holding pre-settled status for five years, individuals are eligible to apply for settled status, which grants them the right to reside in the UK indefinitely. It is important to note that the deadline to apply for the EU Settlement Scheme has passed, and it is no longer possible to apply if you were residing in the UK before December 31, 2020, unless you have a reasonable excuse for missing the deadline.
Can I get a mortgage with pre-settled status?
Yes, there are plenty of lenders who will consider mortgages for those with pre-settled status. However, there are a few considerations and requirements to keep in mind. This guide will explain all you need to know.
How long do I need to have lived in the UK to get a mortgage?
The duration of time you need to have lived in the UK to be eligible for a mortgage can vary among lenders. While some lenders may not have a specific minimum requirement for residency, others may require a certain period of residency before considering your mortgage application. It’s important to note that this requirement can vary based on several factors, including the lender’s policies, your deposit level, income, and credit score.
Typically, lenders will assess your financial stability and ability to repay the mortgage. They will consider factors such as your income, employment history, credit history, and the amount of deposit you can provide. These factors play a significant role in determining your eligibility for a mortgage, regardless of the duration of your residency in the UK.
Deposit requirements
Deposit requirements for a mortgage can vary depending on the lender’s criteria and various factors such as income level, length of time in the UK, and your residency status. Some lenders may accept a minimum deposit as low as 5% of the property’s value, allowing you to obtain a mortgage with a 95% loan-to-value (LTV) ratio. However, other lenders may require a higher deposit of up to 25% or more, resulting in a lower LTV ratio.
It’s important to note that certain lenders may have stricter requirements and may only consider mortgage applications from individuals with permanent rights to reside in the UK, such as those with settled status or British citizenship. These lenders may view permanent residency as a crucial factor in assessing an applicant’s eligibility for a mortgage.
Pre-settled status mortgage rates
The products and interest rates offered to those with pre-settled status are the same as those offered to British citizens. However, it is worth noting that not all lenders allow applications from individuals with pre-settled status. As a result, you may have fewer options and potentially end up paying higher interest rates. Nonetheless, the actual products themselves remain unchanged.
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How to get a mortgage with pre-settled status
Securing a mortgage with pre-settled status involves several steps. Here’s a general outline of the process:
- Find a Specialist Mortgage Broker: Look for a mortgage broker who specialises in helping individuals with pre-settled status. They will have experience working with lenders who are open to lending to non-UK citizens.
- Gather Required Documents: Prepare the necessary documentation, including identification, proof of address, proof of income, and evidence of your residency status (such as a share code, residence permit, or visa).
- Research Mortgage Options: With the help of your specialist broker, research and compare mortgage options available to individuals with pre-settled status. Consider factors such as interest rates, repayment terms, and any additional requirements or restrictions.
- Secure a Decision in Principle (DIP): Obtain a Decision in Principle (also known as an Agreement in Principle or Mortgage Promise) from a lender. This is a preliminary assessment that indicates how much you may be able to borrow based on your circumstances.
- Find a property: Start searching for a property that meets your needs and budget. Engage with estate agents or search online platforms to identify suitable properties.
- Apply for the Mortgage: Once you’ve found a property, submit a full mortgage application to the lender. Provide all required documentation and complete any additional forms or questionnaires as requested.
What documents are required to get a mortgage with pre-settled status?
To obtain a mortgage with pre-settled status, you will generally need to provide similar documentation as UK citizens. This includes:
- Identification (ID): A valid form of identification, such as a passport or national identity card.
Proof of Address: Documents that confirm your current address, such as utility bills or bank statements. - Deposit: Evidence that you have the necessary funds for the mortgage deposit. This can be shown through bank statements or savings account statements.
Proof of Income: Documentation that demonstrates your income, such as pay slips, employment contracts, or tax returns. - Residency Status Evidence: As someone with pre-settled status, you will need to provide evidence of your residency status. This can be in the form of a share code for EU nationals, a residence permit, or a valid visa.
It’s important to note that specific requirements may vary depending on the lender and individual circumstances. It’s advisable to consult with the mortgage provider directly to get precise information about the documentation they require for mortgage applications.
Buy to Let mortgages with pre-settled status
Many mortgage lenders are willing to consider applications from individuals with pre-settled status. However, in addition to the general documentation requirements mentioned earlier, there are often specific criteria that need to be met. These criteria can vary between lenders but commonly include the following:
- Deposit: Many lenders require a minimum deposit of at least 25% of the property’s value. This means you will need to demonstrate that you have the necessary funds available for the deposit.
- Minimum Income: Lenders often have minimum income requirements that applicants need to meet. This ensures that you have a stable financial situation and can afford the mortgage repayments.
- Property Ownership: Some lenders may require you to either already own a property or have previously owned a property. This requirement can vary and may not be applicable to all lenders.
It’s important to research and compare different mortgage lenders to find the ones that specifically cater to individuals with pre-settled status and meet their specific criteria.
For more information on pre-settled status mortgages, please contact a member of the Strive team, by emailing info@strivemortgages.co.uk or call us on 01273 002697.
