03/04/2020
The UKโs mortgage market has changed profoundly in the last two weeks as the full effect of the Coronavirus has started to be felt. Lenders have been told to allow repayment holidays; moving home is virtually banned leaving swathes of home-movers in limbo; thousands of mortgage products have been withdrawn and the bank base rate has been reduced to 0.1%, the lowest in history.
Not surprisingly, many clients have been making contact to ask questions regarding their mortgage. Iโve attempted to provide answers to the most common questions, which I have detailed below.
I hope that the information I've provided below is helpful. Please do make contact if you need assistance in these difficult times, whether it be advice on your next home move, you are looking to re-mortgage or wishing to protect your finances. You can contact me in the following ways;
Email - [email protected]
Mobile - 07921550708
or you can message me on this page.
Best regards
Ged Potts
๐๐จ๐ฆ๐ ๐๐จ๐ฆ๐ฆ๐จ๐ง ๐ช๐ฎ๐๐ฌ๐ญ๐ข๐จ๐ง๐ฌ ๐ฒ๐จ๐ฎ ๐ฆ๐๐ฒ ๐ก๐๐ฏ๐ ๐ซ๐๐ ๐๐ซ๐๐ข๐ง๐ ๐ฒ๐จ๐ฎ๐ซ ๐๐ฎ๐ซ๐ซ๐๐ง๐ญ ๐ฆ๐จ๐ซ๐ญ๐ ๐๐ ๐ ๐ฉ๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง:
๐ ๐ก๐๐ฏ๐ ๐๐ฑ๐๐ก๐๐ง๐ ๐๐ ๐จ๐ง ๐ ๐ง๐๐ฐ ๐ฉ๐ซ๐จ๐ฉ๐๐ซ๐ญ๐ฒ, ๐๐ฎ๐ญ ๐ง๐จ๐ญ ๐ฆ๐จ๐ฏ๐๐ ๐ข๐ง. ๐๐ก๐๐ญ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ ๐๐จ?
The Government has stated that they do not want you to move during the lockdown, unless it is in exceptional circumstances. If you can therefore delay your move then you should. Mortgage lenders are now extending the expiry date on offers by three months to hopefully allow more time, while many solicitors are adding new clauses into contracts in case purchases donโt progress.
๐ ๐ก๐๐ฏ๐ ๐๐จ๐ฆ๐ฉ๐ฅ๐๐ญ๐๐ ๐จ๐ง ๐ ๐ง๐๐ฐ ๐ฉ๐ซ๐จ๐ฉ๐๐ซ๐ญ๐ฒ, ๐๐ฎ๐ญ ๐ง๐จ๐ญ ๐ฆ๐จ๐ฏ๐๐ ๐ข๐ง. ๐๐ก๐๐ญ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ ๐๐จ?
As with exchanges, the Government is requesting that moves donโt occur unless there is no option. If you do have to move, then take extra precautions to adhere to the social distancing rules.
๐๐๐ง ๐ ๐ช๐ฎ๐๐ฅ๐ข๐๐ฒ ๐๐จ๐ซ ๐ ๐ซ๐๐ฉ๐๐ฒ๐ฆ๐๐ง๐ญ ๐ก๐จ๐ฅ๐ข๐๐๐ฒ?
All lenders are required by the Government to offer borrowers the opportunity to take a three-month payment holiday. This is true for all homeowners, Buy to Let mortgages and for clients who have used the Government's Help to Buy scheme. The repayment holiday is available to borrowers who are up-to-date on their mortgage payments and not already in arrears.
๐๐ก๐จ๐ฎ๐ฅ๐ ๐ ๐ญ๐๐ค๐ ๐ ๐ซ๐๐ฉ๐๐ฒ๐ฆ๐๐ง๐ญ ๐ก๐จ๐ฅ๐ข๐๐๐ฒ?
We believe that over 1 million borrowers have already requested a holiday and if you are in a position where you will struggle to meet your monthly mortgage payments, then it is a sensible thing to do. You wonโt need to go through a means test or demonstrate your income drop. There also isnโt a fee to pay. However, I would stress that this is not free money and that you will need to make up the missed payments in due course. Instead at the end of the three month holiday, you will need to agree higher repayments moving forward with your lender or extend the term of your mortgage. As such, taking a holiday will cost you more in the longer-term. My recommendation would therefore be to not take a holiday unless you really need to.
Also, if you are coming up to the end of term on your existing mortgage deal, then be aware that taking a repayment holiday could impact on whether or not you can qualify for a re-mortgage or a new deal with your existing lender. Please therefore talk to me first before applying.
๐๐ญ'๐ฌ ๐ข๐ฆ๐ฉ๐จ๐ซ๐ญ๐๐ง๐ญ ๐ญ๐ก๐๐ญ ๐ฒ๐จ๐ฎ ๐๐จ๐งโ๐ญ ๐๐๐ง๐๐๐ฅ ๐ฒ๐จ๐ฎ๐ซ ๐๐ข๐ซ๐๐๐ญ ๐๐๐๐ข๐ญ
๐ญ๐จ ๐ญ๐ก๐ ๐ฅ๐๐ง๐๐๐ซ. Simply cancelling the direct debit may cause issues later down the line when you come to the end of your payment holiday and could cause you to miss a mortgage payment in the future. A missed mortgage payment will show on your credit file.
๐ ๐๐๐งโ๐ญ ๐ ๐๐ญ ๐ญ๐ก๐ซ๐จ๐ฎ๐ ๐ก ๐ญ๐จ ๐ฆ๐ฒ ๐๐๐ง๐๐๐ซ. ๐๐ก๐๐ญ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐ ๐๐จ?
All of the lenders have been swamped with calls from borrowers about repayment holidays at a time when they were also trying to move significant numbers of staff to remote working. Many have consequently struggled to cope, leading to long waiting times. I would therefore encourage you to wait a few days for things to quieten down and try again or alternatively look on the lenders website. Most have detailed information on their response to COVID-19 and how to request a repayment holiday.
๐ ๐๐ฆ ๐๐จ๐ฆ๐ข๐ง๐ ๐ญ๐จ ๐ญ๐ก๐ ๐๐ง๐ ๐จ๐ ๐ฆ๐ฒ ๐๐ฎ๐ซ๐ซ๐๐ง๐ญ ๐ฆ๐จ๐ซ๐ญ๐ ๐๐ ๐ ๐๐๐๐ฅ. ๐๐ก๐จ๐ฎ๐ฅ๐ ๐ ๐ซ๐-๐ฆ๐จ๐ซ๐ญ๐ ๐๐ ๐?
A significant number of products, particularly trackers and those at higher loan to valueโs, have been withdrawn by the lenders in recent days. However, over 10,000 products are still available and rates remain at historically very competitive levels. Funding may become more constrained in future, so if you are within six months from the end of your current deal, please get in touch and Iโll talk you through the options available.
๐๐ฒ ๐ข๐ง๐๐จ๐ฆ๐ ๐ก๐๐ฌ ๐๐ซ๐จ๐ฉ๐ฉ๐๐. ๐๐จ๐ฐ ๐ฐ๐ข๐ฅ๐ฅ ๐ญ๐ก๐ข๐ฌ ๐ข๐ฆ๐ฉ๐๐๐ญ ๐จ๐ง ๐ฆ๐ฒ ๐๐๐ข๐ฅ๐ข๐ญ๐ฒ ๐ญ๐จ ๐ ๐๐ญ ๐ ๐ฆ๐จ๐ซ๐ญ๐ ๐๐ ๐?
All lenders look at your current income and any expected or known changes when they assess whether you can afford a mortgage. With access to a comprehensive range of lenders from across the market, I can help you find a mortgage thatโs right for you and that is affordable based on your income and expenditure.
๐ ๐๐ฆ ๐ฅ๐จ๐จ๐ค๐ข๐ง๐ ๐ญ๐จ ๐๐ฎ๐ฒ ๐ ๐ฉ๐ซ๐จ๐ฉ๐๐ซ๐ญ๐ฒ. ๐๐ก๐จ๐ฎ๐ฅ๐ ๐ ๐๐จ๐ง๐ญ๐ข๐ง๐ฎ๐?
The number of property transactions are dropping fast and we expect the market to be in a state of suspended animation for at least the next two to three months. As such, even if you wanted to make a purchase you would find it difficult, unless it was a property you already knew and therefore didnโt need a survey and were buying with cash only. There are plenty of commentators predicting a big fall in house prices, but in reality this is guesswork and it will be many months before it is clear whether or not prices have been impacted. Most property purchases are made for a reason โ perhaps clients need more or less space, or they are changing work location - so on that basis alone I expect the market to gradually re-start once the immediate lock-down eases.
๐๐จ๐ฎ๐ซ ๐ก๐จ๐ฆ๐ ๐ฆ๐๐ฒ ๐๐ ๐ซ๐๐ฉ๐จ๐ฌ๐ฌ๐๐ฌ๐ฌ๐๐ ๐ข๐ ๐ฒ๐จ๐ฎ ๐๐จ ๐ง๐จ๐ญ ๐ค๐๐๐ฉ ๐ฎ๐ฉ ๐ซ๐๐ฉ๐๐ฒ๐ฆ๐๐ง๐ญ๐ฌ ๐จ๐ง ๐ฒ๐จ๐ฎ๐ซ ๐ฆ๐จ๐ซ๐ญ๐ ๐๐ ๐.
