The advice of an expert mortgage broker can save you both time and money, especially with lenders.
With the rising financial tensions all over England, businesses and self-employed workers are having questions regarding the current state of the property market. The current state refers that companies that once offered mortgages to people with credit scores of 620 are now requiring scores of 680 or even 700 in some cases, and some are demanding higher down payments.
Taj Accountants suggests that, with the ongoing lock-down situation, now could be a good time to use a middleman aka a mortgage broker who can help you find a lender with the best deal and provide you with the best advice regarding remortgaging.
How a Mortgage Broker Can Assist You:
A mortgage broker does all the research about lenders and chooses the one with the best rates, also depending on your credit score and money for a down payment, finds the best lender that offers you a loan. Mortgage brokers have partnerships with a variety of lenders, and they set you up with the best fit based on your financial situation and preferences.
There are mortgage brokers in London who’re providing online services based on the current situation and working hard to help you save time and money with their years of expertise.
Getting a Mortgage During the COVID-19 Pandemic:
Mortgages are now at an incredibly low rate, even at five-year fixed terms. Your mortgage broker can find you an offer or rate that’s right for you which will be perfectly feasible to “hold” that rate for up to six months.
At this moment, Loan to Values (LTVs) are changing on a daily basis which refers to the amount you can borrow compared to the valuation of the property. Recently most lenders reduced their LTV down to only 60%, also with some major lenders they’ve risen back to 80%. And if you have a good credit score and plenty of money for a down payment, a broker can also help you lock in a low APR as rates rapidly fluctuate.
Based on the current situation, mortgage valuation is being carried out remotely which can affect the value that you might be expecting. However, you can re-evaluate and potentially have the valuation increased by challenging. If you’ve previously received a ‘mortgage in principle’ offer, it should still be valid, and can likely be extended for a further period if you need it to be.
You can still remortgage or move to a different rate with the same lender even though a lot of moving and new purchases are paused in the UK. In such cases, a mortgage broker can do the research for you among the lenders they work with, which can save you a lot of time and stress, and ultimately land you a better rate.
Here’s What You Can Do to Your Current Mortgage If You’re Struggling to Pay or Have a Reduced Income:
If you’re struggling to pay or have a reduced income, then it's good news for you that most lenders are allowing a three-month repayment holiday which means you don’t pay for three months straight. This will instead get added to the end of your mortgage term.
Another good news is that, currently all credit rating agencies have stopped penalizing anyone for taking a payment holiday due to the pandemic, as long as it is in agreement with the lender.
Also, now you have an option to ask your lender if you have a full capital and interest mortgage, you can ask your lender to temporarily change it to interest-only. For that, you’ll need to switch back to full repayment as soon as you can, and for any missed interest payments you'll still need to make up for later mortgage payments. This could however reduce your current payments, in some cases by over two thirds, and can be carried out for a year or more if needs be.
Speak to your broker if you’re planning to switch your mortgage rate or before requesting a mortgage holiday. You can also contact your local accountants in London if you’re intending to do some calculation regarding your mortgage and your property.
When You’re in the Middle of Buying a House During the Pandemic:
The government has made some amendments in the coronavirus (COVID-19) regulations to assure that people who wish to move home can do so. According to the UK government, you’re able to continue with the transaction if the property you’re due to move into is currently vacant. But if the property is occupied, the sale might be delayed. In such cases, mortgage lenders have been asked to be as flexible as possible in these situations.
The advice currently being given is either to exchange and complete simultaneously or to agree on a flexible completion date. This government's guidance has provided important public health information to ensure that moving home and key activities around this, such as viewing property, can happen safely.
If Your House Is on the Housing Market:
If your house is already on the market, it can continue to be promoted, although you won’t be able to offer in-person viewings. But putting your house newly on the market or making offers is currently paused at the moment. The pause on newly putting your house on the market has occured as it’s now not possible to have visitors in your home to do a valuation, take photos, or get a survey done.
Currently the values of properties are hard to forecast due to the possibility of recession. But on the brighter side, it can be said that the trend is always up if one looks at property prices over the long-term. Thus, long-term investment for either your home or and a property will always rise back in the future. So, for either selling or buying, it can be said that property remains as one of the safest zones and most popular forms of financially stable market.
If You’re Considering Remortgaging:
Remortgaging refers to either staying with the same lender or changing to a new lender with the purpose of either getting a lower interest rate deal or releasing some equity for yourself. Remortgagers are subject to getting a satisfactory property valuation, however there are a number of lenders who will do a valuation for you remotely.
UK mortgage rates have dropped to their lowest levels following the cut in the Bank of England base rate to 0.1% on 19 March which is the lowest it has been in the Bank’s 325-year history. Which means many borrowers are now able to reduce their mortgage costs considerably by remortgaging to a more competitive deal.
Based on the current circumstances, remortgaging might save you hundreds of pounds a month in interest payments. For that you need to seal the base rate in order to avoid any increases which may come around by the time your present rate expires. Now you can just sit at home and do it online instead of going to the lenders (banks).
You have now an option to rate-switch if you wish to stay with the same lender. You can contact your broker and go through the best available deals from your lender. Your broker can also compare the rates of your lender with the current market rates and give you more options if you plan to switch. Your broker can help you negotiate with your current lenders regarding the rates.
If you’re concerned regarding how you will keep up with your mortgage repayments, or you have any other financial worries, you can contact Taj Accountants for any financial help. We offer a range of accountancy services and provide tax services and advice, accounting services, payroll, tax return, accounts for self-employed and accounts for limited companies to clients throughout London.
DISCLAIMER: The purpose of the blog is to provide information and insight regarding the situation. The readers must contact experts before making any decisions based on the information. We highly appreciate you to contact Taj Accountants for further assistance.