You may have heard in the press lately that getting a mortgage is either very difficult or impossible. And if you’ve heard these stories, you may have also read that lenders are pulling away from wanting to lend to people because of a fear of house prices falling.
All in all – things may appear pretty bleak, right?
It’s true that in light of the situation with Covid, the mortgage application process has become a little tougher. Lenders want more information on future income and job sustainability, particularly if you’re self employed. And if you’re working in the hospitality sector then you may need to brace yourself for a rough time if you’re thinking of buying a house.
If we’re honest, whilst this is all frustrating, to a large degree it is understandable. The lenders have a responsibility to lend their money responsibly – meaning that they shouldn’t be lending money to people who stand no realistic chance of paying it back. And as a responsible brokerage service, we have to agree. No one wants to be, or to put someone else, in the position where a bank takes their home away.
So to make sure this doesn’t happen, lenders are digging down into the detail of an application a little further. And this takes time. Additional questions take a little longer to answer, such as how well has your industry been performing? Have you been on furlough and will you go back to work when the scheme ends? If you’re self employed, have you been able to keep trading during the pandemic, and if so, is it likely this work will continue? And these questions are often harder to answer as there’s no set evidence to support it either way.
As a result, mortgage decisions are taking a little longer to arrive at. But if we can take a moment to reassure you – this is for your own good. It’s far better to be declined a mortgage than it is to take a mortgage you then fall behind on.
With regards to lenders worrying about house prices dropping, and therefore being less willing to lend, we think this will be a short lived concern (although we can never say this for certain). Once the economy starts to calm down and a new swing of life is found, the lenders will bring back those all important 90 and 95% mortgages.
The good news is that we’re still able to get people’s mortgages approved. We’re still sending out full mortgage offers to our customers (several just went out today whilst typing this!). And we’re still seeing lots of people being able to either buy their first homes or refinance existing mortgage deals to reduce their monthly payment or consolidate other debts.
Whatever your situation though, pick up the phone and call us. Speak to one of the team who’ll help you better understand where your situation leaves you in regards to getting a mortgage.
We’ve always been proud to be an honest broker, and if we can’t say yes today, we’ll tell you what you need to know so that one day we do say yes, with confidence and your needs and requirements right at the heart of it all.