Can I get a Mortgage during Lockdown?

As we are well into the lockdown, lenders practices are evolving all the time. For mortgages we need to break it down into three sections:

1. Can I remortgage during the lockdown?

In short yes, however there are a few pitfalls for you to watch out for. Firstly if you want to borrow more than 75% of the property value you may struggle. The reason for this is that lenders may want to carry out a valuation of your property, if you are borrowing under 75% most lenders have an automated or desktop valuation system in place that means a person does not physically need to visit the property. For those of you wanting to borrow over 75% of your property value then the most sensible course of action would be to contact your existing lender to see if they have any product transfer deals that would be appropriate for you, or get a broker to do it for you.

2. Can I move house in the lockdown?

This is a bit more tricky, I have arranged mortgages during the lockdown for people who are moving house as they have been for mortgages of less than 75% of the property value (see above). I have also had clients who have moved during the lockdown, this is a bit of a grey area as far as the “rules” go. All of my clients were moving into empty properties so a short chain, presumably all social distancing measures were adhered to. 

The main issue with purchasing a property is the difficulty getting a valuation, if a surveyor cannot attend the property and the lender wants a valuation then you are snookered.

3. Can I get a mortgage if I’m furloughed?

In theory this is a yes. However as I mentioned earlier, lenders practices are constantly evolving and the longer the crisis continues then the less generous they are going to be. At the moment many high street lenders are saying they will lend to you based upon your furlough amount. Ideally your application will be accompanied by a letter from your employer stating that you will be welcomed back at work after the crisis is over. The chances are that if you were thinking of moving house you may well have put that on hold for the time being anyway. For a remortgage whilst furloughed, then again as long as you are looking at 75% or less and the mortgage is affordable on the furlough salary then you are good to go.

I hope these tips help, for more you can find me on Facebook, Linkedin, Twitter and Instagram. Happy to have a no obligation chat, all mortgages applied for during the lockdown will have no broker fees applied.

What have I learned recently!

I’ve not written a blog for months, in fact the last one I wrote was a bit “woe is me” piece about my home improvement problems.

You will be pleased to hear that the house has finally been completed and we have re-installed our kitchen and have a new floor laid after our flood. It was stressful and the insurance claim is a protracted and painful process that has still not been 100% resolved.

However today I’m going to move away from home improvement and touch on some other areas I have been lucky enough to learn about in recent weeks.

The nice people at HSBC for intermediaries invited me along to a seminar at the end of October which was very interesting. It was held at Mercedes Benz world, which was great even for an anti-petrol head like me.

One of the things I like to mention in Blogs over the years is the Bank of England interest rate. I have made many predictions and I’m quite pleased to say I’ve been pretty accurate so far. The main factor I like to draw your attention to is wages. Once wages are outstripping inflation for a sustained period of time then you can expect a rise in interest rates.

Wages in real terms  are actually less than they were in 2007. I do think this is changing, slowly but surely and this will point towards a rise eventually.

However there is an unknown variable that has cropped up, sorry to bring this up, Brexit.

It is this matter that brings me back to HSBC, the nice chap giving a presentation mentioned this in his analysis (as well as lots of other stuff), and said that their prediction was no further interest rates would happen until 2021.

This is backed up by the proliferation of really competitive five year fixed rate products available right now. With the right equity/deposit you can secure a five year fixed rate at under 2%. That is cheap money.

Another presenter who intrigued me was talking about technology and in particular API’s. This stands for Application Programming Interface. We use them all the time without knowing it. Loads of apps on your phone will use API’s. The point the presenter was making was that soon you will be able to apply to mortgage companies with the help of API’s taking information from other apps (personal information) and pre-populating a mortgage application. This isn’t really available right now and having done a bit of research myself I see it is a little way off yet due to all the lenders being quite defensive over their own then you can expect a rise in interest rates.systems. Plus there is the data protection issue so I think we should watch this space and see what happens.

I’ve been pleasantly surprised and inspired by a number of life insurance companies and their enthusiastic business development managers. Legal and General, Royal London and Vitality Life all have hit home with some remarkable statistics and some really good products.

In particular I have been struck by Vitality Life and how they are encouraging healthy lifestyles. So inspired was I that I have signed up for a policy. They offer a premium discount up front and if you “engage” with them by being active you will continue to receive that discount You can also get offers and discounts on various goods such as fitness trackers, apple watches etc.

In my world very few clients see the benefit of insurance and yet we all have it in one form or another. The cat is insured, the TV is insured, the car is insured but very few of US are insured. Have a think about what would happen if you couldn’t work for a year. What would you give up? Have a look at this old blog from 2016 for a bit of useful information.

If you would like to discuss what insurance and protection policies are best for your individual circumstances, please get in touch. Or if you have a question about any of the above, leave a comment in the box below.

A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME OR PROPERTY. YOUR HOME OR PROPERTY  MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT. 

DIY Mortgages - Advice for those who don't want a Mortgage Adviser

This may seem like a strange post for a mortgage broker to be publishing but I’m going to give you a little DIY advice.

Due to the wonders of the world wide web, you no longer have to trawl the high street and talk to each bank and building society you can to find out who has the best mortgage deal.

There are loads of comparison sites you can access now, from the convenience of your sofa, and you’ll largely get to see the same deals that I can on my system (so why would you need me? Answer here).

How To Compare Mortgage Products

When inputting your details I would try and put as much information in as possible so the data returned is more accurate. Often on the comparison sites when the deals are shown there may be “sponsored” deals at the top. This is a bit like a Google search where the sponsored links are at the top of the page, so make sure you check the deals lower down to ensure you are getting the full picture.

Another thing to look out for are the fees. All the lowest interest rate deals on the market have lender arrangement fees; on average £999. Paying a fee isn’t necessarily always appropriate, depends on how much you are borrowing really.

Valuation fees usually are payable when you are purchasing a property, the amount is dependent on the value of the property so watch out for this as well.

Often overlooked are the cost of legal fees. This is mainly when you are seeking a remortgage. Many lenders offer “free legals” which basically means the lender will pick up the cost of a standard remortgage. In my experience the comparison sites are not very clear on this so often the deals that appear to be the cheapest might not include the costs of legal fees. This can be around £500 so it is often more cost effective to have a deal where the lender pays for this.

You need to be financially confident that you understand the jargon and you know your circumstances so you can narrow down the right deal. Ideally if you are confident then you can apply direct via a lender’s website thus bypassing the wait for their adviser to call you.

The lender will perform their own affordability calculation to establish if you can afford the mortgage so you’ll need to disclose all your financial information to them. As a rule you’ll need to give them details of what comes in (income) and what goes out; personal loans, credit cards, school/nursery fees etc. etc..

Make sure you are prepared to send in your paperwork. They may ask you to email or upload your documents to a secure portal. If this is the case it is probably best to have all your documents scanned in ready before you apply. You will need:

• Copy of your Passport or Driving Licence

• Address ID – utility bill or Mortgage Statement or Council Tax bill (not mobile phone bill)

• Latest P60

• Last 3 months payslips

• Last 3 years accounts if self employed and last 3 years SA302 Tax Calculations with corresponding Tax Year Overviews (from HMRC Website)

• Last 3 months personal bank statements

• Evidence of Deposit/Savings

Once the application is underway the lender may come back and ask for more stuff, depending on how the credit score pans out, and some lenders also ask for clarification on items they see on your bank statements.

All in all it is about being confident that you can understand all the terminology and you have the time to complete the application yourself. It is certainly getting easier these days with all the technology.

The final thing to be aware of though is that if you decide to do it all yourself then you will not be deemed as having received advice. This means there is no comeback on the lender, you can’t have been mis-sold if you sold it to yourself.

You should also bear in mind that if your mortgage application is refused it can affect your credit score. This in turn may affect your ability to secure another mortgage product. Therefore it is important to make sure that your figures add up, you have all the documentation needed, and that you’re confident that your application should be straightforward. One of the advantages of using a mortgage broker or adviser, is that they’re expertise increases the chances of being offered a Mortgage Agreement in Principle and that also helps protect your credit score.

However I wouldn’t let these factors put you off, as I said it’s all about your own confidence to carry out the legwork.

If you decide it is not for you, you know where I am!

A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME OR PROPERTY. YOUR HOME OR PROPERTY  MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.