How will Covid 19 effect my mortgage?
As we head into our fifth week of the lockdown, True Cost Mortgages wants to reach out to you and confirm we are still open for business with all our advisers working from home.
Below are the most common questions asked by our customers but whatever your query please get in touch as we are here to help you during these very uncertain times.
How do I apply for a payment holiday?
Most lenders will offer a payment holiday with many making it very easy to apply by creating an online request form on their websites. Alternatively, you can call them direct on the telephone numbers advertised on the websites although they may be busy so be prepared to be on hold for a while. If you have any issues, then call our helpline and we can offer some further guidance.
Can I still get a mortgage?
The mortgage market did contract initially but we are now seeing lenders introducing more products and updating the lending criteria to take into consideration the effects of Covid 19. If you are considering applying, please call or helpline on 0800 035 2989 so we can assess your circumstances.
How do I get a mortgage if I have been furloughed?
Yes, mortgages are generally available for clients who have been furloughed, however, the lender will use your current furloughed income subject to a maximum of £30,000 per annum which is the maximum payment on the furlough scheme. If the mortgage is affordable based on these figures, then there is no reason your application can’t be considered. The lender will use the normal 80% of your furloughed salary unless you can obtain written confirmation from your employer that you are receiving your full income as they will be making up the 20%.
I’m coming to the end of my fixed rate can I still do a product transfer.
Yes, most lenders who offer product transfers will continue to allow clients to switch when you come to the end of your initial rate. If you are coming to the end of your incentive period do not just accept what the lender offers as we can offer a mortgage review service. We will review what the existing lender can offer and then compare this to the open market. We can then offer advice if its best to stay or go. This service is free so its worth contacting us.
Are interest rates going to fall or rise?
That the million-dollar question. The Bank of England has reduced the base rate to 0.1% so that can’t go much lower. We have noticed some rates come down. If you are thinking of mortgaging this is a good time to do it as rates are very low. The typical two-year fixed mortgage has fallen to 2.11 per cent, a low not seen since October 2017, The two-year average rate has fallen from 2.28 per cent on 3 April, and 2.39 per cent on 24 March. This time a year ago the rate was at 2.48 per cent.
What will happen to my existing application or mortgage offer?
If you have received your mortgage offer, then there should be no reason why that will not be honoured. If it’s a re mortgage we would expect that to proceed to completion with little delay as most solicitors are able to work from home. If a purchase, then there may be delays as completions are being delayed due to various complications caused by Covid 19.
If you have applied for a mortgage and not received your mortgage offer your application will be processed with some delays. If the lender requires a physical valuation this will delay the application as valuers can’t work at present due to the lockdown. The application will remain on hold until the valuation can be carried out.
Most lenders are trying to value properties via desktop valuation, however, these are only appropriate for lower loan to values under 85%.
If you have any other questions, please call our helpline 0800 035 2989 or book a Zoom appointment with one of our advisers. Just click the Ask us to call you and book the time and day and we will call you.
Keep safe Stay at Home
