With unprecedented Stay-At-Home directives, furloughing and travel restrictions, we take stock on how the mortgage market has changed since March.
“Well at least the sun is shining.” We have heard that a lot over the last few weeks and we have to say we agree. Imagine working from home, schooling kids and finding some time to relax if it was cold and rainy outside. While we all settle into a new routine, brokers and lenders have been working hard to find ways to help clients continue to obtain mortgage finance, and here’s what’s happening.
How has processing been affected?
Lenders & Solicitors have reduced staff numbers in processing centers. Either to minimal staff in a center or with staff working from home. Therefore communication with the lenders and solicitors is less accessible and much of the mortgage processing for lenders is being done by automated systems. This is great as it keeps the wheels moving. The downside of this is it can be more difficult for brokers and clients to get quick mortgages updates. We just all need to move our expectations in line with this. What may have taken a few hours before may now take days and sometimes even weeks.
Is anything being done?
There are indications that the automated valuations (which lenders need to use as valuers cannot currently carry out physical valuations), are being bolstered by adding additional data into the system and having individual valuers with local area knowledge add their input. This is fantastic news and will allow lenders to carry out automated valuations on a higher percentage of properties. It’s great to see fast responses and innovation such as this.
I’ve been furloughed. Can I still get a mortgage?
Being furloughed does not mean you have lost your job. Therefore lenders can still use the furlough income towards affordability. They will use 80% of basic income up to £30,000 in line with the Government scheme. Some lenders may use the 20% top up if you are also being paid this. Lenders will however not use any bonus, commission or overtime income when checking affordability for the mortgage.
My rate expires this year. When should I look at remortgage options?
Generally we tend to look at remortgage options around 4 months before the existing product is set to expire. However as processing centers are slowed up, solicitors experience delays and we need to rely on automated property valuations, looking sooner rather than later has never been so important. Any mortgage due for a review this year is worth looking into now. Getting paperwork ready and the file up-together allows you to choose when you book a product rather than being forced into a quick decision further down the line.
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