Covid & The Mortgage Market – Home Financial
What is the current market situation (due to coronavirus) for those looking to get a mortgage?
The market is still very much active, lenders are lending within reason, but with some restrictions. The pandemic seems to have caused a period of reflection since March 2020, which has prompted people to make the moves that they may have been considering for some time.
Are property viewings happening with social distancing?Over the past twelve months, we have predominantly helped customers now via the telephone, Zoom, or via email and this hasn’t affected the level of service we could offer at all. This may see a change in the mortgage industry as a whole going forward, as there is no reason that mortgage brokers would need to be location specific if they can help customers remotely.
With regards to solicitors, they have operated very much the same way and I think many businesses have started to embrace technology in order to succeed in the current climate and they have done so very successfully. I think from the customer’s perspective everything’s become quite convenient for them. We can now schedule a zoom call in the evening, which takes away the barriers of geographical location, travel, and taking time away from work. With this method, it’s still perfectly achievable to develop the client relationship as it was on a face to face basis.
How have those that have been furloughed been affected in terms of borrowing?
With furlough, there’s obviously an element of uncertainty in the customer’s situation. which, Unfortunately from the lender’s perspective, furlough immediately causes doubt on the stability of the application.
From the borrower’s perspective, there’s also a conversation to be had about whether now is the right time for them to be applying for a mortgage. This will vary from client to client depending on which industry they work in and how much certainty there is that they will return to full paid employment in the same or a similar position after the pandemic.
In terms of government advice, is it currently acceptable to move house?Since the summer, the housing market has very much stayed open and remained active, but with the usual guidelines in place. So if you are thinking of moving house, you can still do it as long as you obviously operate safely and take the right precautions.
Surveyors and the Mortgage Lenders will do remote valuations(desktop valuations) where possible so that there is no need to visit the property. Naturally, there are scenarios where that’s not possible, but the whole industry is trying to utilise the technology available to enable the industry to operate without as much contact as was required before.
Is there help available for First Time Buyers?There are support options available, like the new Help to Buy scheme. What is needed next is higher Loan to Value mortgages, from a First Time Buyer perspective to enable them to get onto the housing ladder. Some lenders are starting to return to 95% mortgage deals and as this type of higher Loan to Value mortgage products continue to become available, that should stimulate and support the market further.
What about mortgage holidays?The mortgage payment holiday period that a lot of clients took advantage of last year, was always there. If you’re struggling with your mortgage payments, you’re encouraged to liaise with your lender, and they will offer support where possible. What the government did was make it mandatory for a period of time. Even though the mandatory period has ended, people are encouraged to speak to their lender for support.
Have 10% deposit mortgages returned?With the 10%deposits, most mainstream lenders are now offering a 90% mortgage and whereas six months ago only one or two lenders had that option, there are now several to choose from and it’s quite a competitive market space again.
Are new builds being built and are people reserving new build properties?Builders are still building, but like many things, there are logistics that would make builds take a bit longer than usual, such as social distancing and operating in a slightly more cautious way than they may have done previously.
New build sites are still being developed and the schemes are still there to support buying one of those properties.
Has the Pandemic negatively affected the housing market?There is a lot to be positive about in the property industry at the moment. One thing to note is that it is a fast changing market at the moment. Policies that are in place now could have changed in the next two weeks, so it’s more important than ever if you’re looking to buy a new home, to get a professional Mortgage Broker to advise you.
Those who are on furlough and Self-Employed applicants should bear in mind that a mortgage might not be the best thing to take on at the current time, but speaking to a mortgage adviser can still be beneficial. Even if there are no lenders that are able to lend to you now, it’s a great time to put a plan in place for the coming months. The goal is to put yourself in the best possible position to benefit from a mortgage when the timing is right.
How can Home Financial Help?
Those with queries should get in touch with Ross or anyone from the Home Financial team via the website. There’s a lot of useful content on there about different elements of mortgages too. You can also contact them by phone or email, the contact details for both of those can also be found on the website.