Mortgage Advice during Covid-19 (Coronavirus)
Am I still able to apply for a mortgage?
Yes, absolutely. Lenders are still open for business and are taking new applications. One issue the market is facing however is how the lender values the properties as Valuer’s are unable to physically visit the properties due to Social Distancing Guidelines. Since lockdown began lenders have been implementing new ways to remotely value properties and we expect this to continue to evolve. People with deposits of less than 25% are less likely to find lenders who will do automated valuations. In these instances the application will be assessed, underwritten and then put in a queue for when valuations can be done. With a likely pent up demand when restrictions are lifted, being already in the queue should mean you are able to then complete quicker. For those applications who meet the automated valuation models these can proceed to offer as usual just at a slower pace due to the circumstances.
How do I find out how much I can borrow?
Our Independent Mortgage adviser’s are still working from home and are able to provide you with all the help and guidance you may need. They can advise you of your lending capabilities and arrange you a mortgage agreement in principle so that you are ready to act when the restrictions are relaxed.
Im self employed, what are my options?
Being self employed doesn’t automatically hinder your chances of getting a mortgage even in the current climate. As with employed staff, the underwriters will be looking to see if clients are furloughed when they are making decisions on affordability. For some furloughed staff who earn more than £30,000 per annum in their role this may mean with some lenders there salary is reduced for lending purposes to the maximum furloughed benefit amount of £30,000 per annum. For self employed people, the furlough scheme covers 80% of self-employed workers average earnings up to a maximum of £2,500 per month. HMRC will use the average trading profits from the past three years to calculate the income.
Are all lenders offering payment holidays?
Yes, for customers adversely affected by coronavirus, the Government has confirmed that they can take a mortgage payment holiday on their residential or Buy to Let mortgage for up to three months to help their financial situation.
Taking a mortgage payment holiday means that you won't pay your mortgage for up to three months and the lender will add those payments to their mortgage balance.
As a result:
• your mortgage balance will increase
• the amount of interest you will pay will increase
• your monthly payment will increase and be recalculated over their remaining mortgage term.
The lenders and not charging a fee for taking a mortgage payment holiday and if you are currently up to date with your payments, the mortgage payment holiday won’t impact your credit file, and you won’t go into arrears on their mortgage.
One thing to consider when taking a payment holiday is that it is for clients who have been adversely affected by the pandemic. If you take a payment holiday and then apply for a new mortgage with a new lender to move home or remortgage the underwriters are likely to take this in to account when assessing your new lending capabilities. The payment holiday request suggests you are in financially difficulties even if short term. We would suggest the holidays are only taken if needed. Please speak to our Independent Advisers for advice before requesting a payment holiday if you are looking to move home or remortgage.
My mortgage has already been offered however the completion of the purchase has been delayed due to COVID. What happens if my mortgage offer runs out?
Lenders are looking to extend offers on pipeline applications where the pandemic is delaying the completion to take place. The majority of lenders will extend the offer for a period of 2-3 months. Please speak to your mortgage adviser or solicitor if you do require an extension.