Just because you’re on the Furlough Scheme(or have been on
it), does not necessarily mean you cannot get a mortgage. Several lenders have issued guidelines to
accommodate those on Furlough and will offer mortgage products to them. Especially clients looking to stay with the
same lender and do what is called a ‘product transfer’. As with all
instances, you should speak to a professional broker who can review the whole
market. Staying with your current lender
might be the easiest option, and a broker can arrange this for you, but it does
not necessarily mean it will be the best rate and option available to you. Always shop around, loyalty to lenders should
be the least of your priorities as they may not be loyal to you!
This also relates to mortgage payment holidays. A number of lenders have advised they will
consider clients who have taken a mortgage payment holiday, depending on their
circumstances. However, many have said
they will not assist if the client is still in the mortgage payment holiday so
check the lenders requirements. And we’ve
been made aware of instances where a client has applied to a lender for a mortgage
payment holiday, whilst also applying to purchase a new property for investment! This was not taken lightly by the lender and
the mortgage payment holiday had to be repaid, before the new mortgage could proceed. Mortgage payment holidays really are for
those who are having difficulties in the current climate.
We’ve also had recent updates from lenders who will look in
detail at self-employed clients who have taken out Bounce Back Loans and CBILS funding. Both cannot, in the main, be used as a deposit
for purchasing premises and the lender will want to look at the self-employed clients
cashflow forecasts, management accounts and really understand the impact of
COVID-19 on their businesses, specifically with regards to how income will
recover in the short to medium term.
Finally, the higher loan to value market is like the ‘hokey
cokey’. Some lenders are in, some are
out, some are back in and so on. One
lender even launched a 90% lending product for just 48 hours. Another has launched a ‘tranche’ of funds for
the month. Once it has been used up, that
is it. This is the benefit of using a broker as we
will know what lender will offer such products and monitor the very strict
deadlines to ensure you get the right deal for your circumstances.
