Back in April, we answered the question, ‘how hard is it to arrange a mortgage at the moment‘. Although there have been many changes since then, the general answer is still the same, ‘it’s harder than it used to be’.
The pandemic has affected different parts of the supply chain which has made arranging a mortgage more difficult. This affects certain groups of people more than others, but the good news is there are still solutions available.
Since the first lockdown in March, we have been surprised at the continued demand for mortgage advice. Even when Estate Agent and Solicitor offices were closed, we were still receiving enquiries.
In May we saw some restrictions lifted and this resulted in what was hoped to be the return of the housing market. Although at this stage, it wasn’t clear what the future would hold.
As we moved through June, the housing market came back with a boom. Activity levels soared and house prices increased which was contrary to what many had predicted.
This activity was no doubt helped by the Chancellor’s announcement of a Stamp Duty Holiday for certain transactions until 31st March 2021.
So great for demand, but what about supply?
Lenders have faced various challenges. Initially they had to deal with payment holiday requests. In addition, they had to deal with working remotely and managing risk as well as many other factors.
This has led to various issues such as limited capacity, tighter criteria, higher deposit / equity requirements and backlogs.
The good new is, generally lenders are still looking to lend. If you have a stable job, good salary and 25%+ equity / deposit in place, chances are you’ll be fine. However, for other groups it may not be as easy.
There aren’t very many options available for people with less than a 15% deposit. Those that are available, aren’t very competitively priced and may not be available for very long.
Many lenders have changed how they view employees who receive this type of income. Most have changed tact as we have moved through the Covid-19 situation. Some used to accept furlough income and now don’t. The same can be said for bonus and commission (although some still accept it, albeit to a lesser amount i.e. 50%).
Limited company directors and self employed applicants are subject to much closer scrutiny than ever before. It’s now common for lenders to ask for the last 3 bank statements to demonstrate activity. They may also ask for information from accountants such as their opinion and projections for the business.
There have been a few issues that property investors have had to face when arranging a buy to let mortgage. These include higher interest rates, higher lender fees, having to put down higher deposits and valuation issues (for the property and / or the rental income).
At Easy Street, we have managed to find solutions for all of these scenarios and more. It’s certainly harder to find solutions that it was before and also get them through. However, whenever we have faced an issue, we’ve been able to help in virtually all cases. This is either by knowing where to look or using our experience to think outside the box.
If you are looking for a mortgage, particularly if you’ve found it hard elsewhere or think you will based on your circumstances, please get in touch.
Initial consultations are free of charge and without obligation. We will give you honest, independent advice and look at the whole of the market for you. This includes exclusive deals and lenders who only deal with brokers.