D&G have partnered up with David Jackson, Director of Prestige Private Finance, to answer your mortgage questions now the housing market has reopened. For more information on how we can help you with your mortgage, please get in contact with us.
Is it difficult to get a mortgage at the moment?
We are not back to pre-Covid 19 mortgage conditions, but the banks are continuously making changes to their policies to get back to normal. There are certain areas that are still affected, such as the high loan to values. Some banks are yet to return to 90%, however, lenders such as HSBC, Clydesdale and Virgin have come back to that level recently. There are some income streams which banks are still restricted on, such as applicants’ earnings that include bonuses and commissions. That being said, there are always options. The great thing about speaking to a Mortgage Broker is that they do not just deal with one bank. They have numerous options for which they can find the best solution, which is of course the case in any market condition.
What happens to my mortgage offer if my financial situation has changed due to Covid-19?
All banks are aware of the situation and are questioning whether Covid‐19 has had an impact on someone’s financial situation. You’ll most certainly be asked by your Broker, Financial Adviser and Solicitor whether anything has changed. As with any application at any stage, if there is a material change to your circumstances, you should notify your Financial Adviser who will be able to discuss what, if any impact, there has been on your mortgage offer. Don’t exchange without having these discussions. This applies to any moment in time, not just during the Covid-19 crisis.
Do I need a larger than normal deposit?
The requirement for larger deposits, as high as 40%, initially came in as banks restricted the flow of applications. This was for a very short time; however, lenders have started to ease restrictions, and some are now back up to 90%. So, while it is still a little restricted, it is less so compared to early April.
Is a mortgage payment holiday still capped at 3 months and can I still apply for one?
If you are struggling financially due to Covid-19, the Government has now extended their mortgage payment holiday for a further three months. You can still apply for one, and currently you would be able to extend should you need to. However, if you can pay, it is advised that you do, as the payments still need to be made later down the line.
What is the impact on buy-to-let mortgages?
The restrictions that banks have put in place mean that residential applications take precedent ‐ especially for the main retail banks. As lenders have begun to reduce lending, buy‐to‐let mortgages are, in some instances, restricted to 60%. Where the residential market is nearly back to pre‐Covid‐19 levels, there is still a delay with the buy‐to‐let sector. That said, there are lenders out there who want to do business.
How can a Mortgage Broker help me during Covid-19?
It is important to know that every lender and bank is different, and Mortgage Brokers exist because different banks all have different lending criteria that changes constantly. A Broker’s job is to find the most suitable option for you as an individual, based on your circumstances. If anything changes during the process that will have a positive impact to you, a Broker can help you change lender at any stage during the process, whilst keeping you constantly updated, to ensure you get a service tailored to you. What is recommended today can change in 2-weeks’ time. Brokers are always reviewing your requirements and their previous advice, to ensure you get the best option and guidance at the time.