The second lockdown started on Thursday 5th November. The Furlough scheme has been extended until the end of March 2021.
How has this affected mortgages and your ability to get one?
Payment holidays
Lenders have increased the mortgage payment holiday allowance for another 6 months (for residential and Buy To Let) – this will be welcome news for a lot of people but please remember, these payments will be added onto your mortgage debt. Your payments will be higher when they restart. If you have an Interest Only mortgage this means you will owe the lender more money when your term expires.
Mortgage Offers
The lockdown has stalled purchases so if your mortgage offer is about to expire (typically less than one month) you should be able to request an extension without the need for any further underwriting or property assessment.
Furlough Scheme Extended
Most lenders will struggle to accept furlough income. There are some who will, but this is very limiting. Others can consider your return to work income as long as the return date is within 90 days of the mortgage application
Property surveys
Lenders will try to minimise physical viewing with desktop and remote valuations. This is not always possible so expect some delays with your mortgage offer. The smaller the deposit the greater the chance you will need a physical survey
Property viewing
Still happening but very much dependent on the attitude of the seller and estate agent. If you do physically view potential purchases, please take the necessary precautions.
Service speed
A big issue is the time it takes for a lender to assess and agree the mortgage application. Yes, a lot of lenders are still suffering from this and can take 3-4 weeks to even look at a submitted application. But there are companies out there only taking 2-3 working days. If speed is important, a broker can take this into account when finding the best lender for you
Overall
It is a bit of a minefield, more than it has been for many years and it can feel very frustrating. Using a broker can take away that hassle with good, clear advice. And a broker can package your application well to avoid any delay in getting the right outcome.
Your home may be repossessed if you do not keep up with your repayments