Over the past week, the mortgage market has taken a huge hit from the Coronavirus. Everything is moving so fast, so we’ve decided to bring you up to date with the current situation.
This isn’t a bid to scare you, we just want to explain what is going on at the moment and go over what we may be able to do to help you through the problems you may encounter over the next few months.
The main problem for the market is that surveyors and mortgage valuers aren’t able to go and visit properties. This means that at this current moment in time, the property market is on hold. Lenders need to know what they are lending against, so some sort of valuation is needed before you accept your application.
Some lenders rely on the Automated Valuation Model (AMV’s) for valuations on a property. This is essentially a way for lenders to receive a valuation without actually going to look to the property. However, this is only used when they don’t need someone to go look at the physical property. These types of mortgages are restricted to lower loan-to-values only.
During the last few days, as of March 28th, some lenders have been restricting their maximum LTV’s (loan-to-value) down to 60%. So, they are continuing to process these types of mortgage applications, but not necessarily ones at higher LTV’s.
Each lender is taking a different approach. So far, no mortgage offers have been withdrawn, we think that it is just a waiting game at the moment, lenders are just putting everything on hold before rushing into accepting more mortgages.
In fact, we have seen that some lenders have decided to extend the periods of their mortgage offers from six months up to nine to allow the economy and the mortgage market to get back up and running again.
Following our recent article, where we spoke about Mortgage Payment Holidays, we want to remind you that you should only take one if it’s absolutely necessary. Do some of your own research, speak to a Mortgage Advisor in Manchester, evaluate all of your options and see whether it’s the right thing for you to do.
It’s likely they’ll just extend the period of your mortgage anyway, so you may be better off just waiting a while longer. If you aren’t sure about your ability to keep up your monthly mortgage payments, you should contact your lender. If you decide this is your best option, you’re probably better off getting in touch online due to the number of phone calls they are receiving.
If you’re going to request a payment holiday, make sure you check that it won’t affect your credit rating or mark any arrears against your account. Also don’t just cancel your direct debit, remember that you’ll need permission from your lender first.
Unless you are worried you may lose your job as a result or something like that, you should not pull out of your purchase. We would advise that everyone proceed as normal for now to see what happens. You are not committed to completing your purchase until your contracts are exchanged.
There are no changes here. We will advise you accordingly, once we have assessed your requirements. Please get in touch for Mortgage Advice in Manchester.
The key thing here is to not panic. We’re all here to help you with your mortgage problems, helping you through the next few months. At some point in the coming weeks or months, things will restart again. We’ll all be back to normal in no time.
You can still get in touch with a Mortgage Advisor in Manchester at Manchestermoneyman from 8 am -10 pm, 7 days a week. Business is as usual. We can’t wait for you to get in touch and help you with all of your mortgage needs.