Financial services frequently asked questions during the Coronavirus pandemic

9th April 2020 posted in Sellers Buyers Landlords

Q We have read that lenders are no longer accepting new mortgage applications, is this true?

A few lenders are not accepting any new mortgage applications, others have put in place some restrictions – meaning that they require larger deposits but there are others that are still happy to accept new mortgage applications. We recommend that you speak with an expert broker, whom has access to a number of banks, building societies or specialist lenders.

Q I have requested a mortgage payment holiday from my lender but I would still like to move later on this year, will this affect my chance of getting a new mortgage?

Many lenders have advised that a mortgage payment holiday due to Coronavirus will not affect your credit rating/history.

Q I have already received my mortgage offer, but it is due to expire within the next few weeks, what can I do?

Most lenders are automatically extending your offer by a further 3 months, but if you if you have had a change in circumstance due to Covid-19 you must advise your lender of any changes.

Q Can I still obtain life cover to protect my new mortgage and my family?

Yes you can, again by using a broker that can source and offer advice on the most suitable from a number of providers, would be advantageous. The providers have added a few more medical underwriting questions related to Coronavirus. 

Q We viewed a house before lockdown, can we still make an offer?

Yes you can, even though our offices are closed we do still have staff available to help you with this.

Q I have just had an offer accepted on a property, but how do we apply for a new mortgage?

Our recommended mortgage experts are still working, they are unable to conduct face to face meetings in the office or your own home, but they are now offering appointments via telephone and video conferencing. They have continued to submit many new mortgage applications over the last few weeks. Some of these customers have already received their formal mortgage offer.

Q Are mortgages cheaper since the Bank of England reduced the interest rate?

For those customers that had a Tracker mortgage yes, their monthly repayments will reduce. Some lenders have reduced their standard variable rate in line with the Bank of England base rate reduction too but those with the security of a Fixed rate will continue to pay the same.

Q My partner and I, are looking to buy our first house as soon as lockdown has ended, but I am currently on furlough, will this affect us?

There are lenders that you can still apply for a new mortgage with whilst you are receiving 80% of your basic pay, as long as they deem your new mortgage affordable, some may require a letter from your employer to support this.

Q I sold my house a few weeks ago, but we are still waiting for a surveyor to carry out the buyers valuation, how long does it usually take?

Due to Coronavirus and social distancing surveyors are unable to visit a property in order to complete the valuation and/or survey. For those buyers that have a larger deposit some lenders have been completing automated valuations. If your buyer is not in this category, a surveyor will contact you as soon as they are able to make an appointment.

Q I already have an AIP (Agreement In Principle) from my bank, will this still be valid?

Yes, as long as your circumstances have not changed since you applied for the agreement in principle. 

Q If I take a mortgage payment holiday, will this cost me in the long term?

It is best not to take a mortgage payment holiday unless you feel that it is absolutely necessary. If you do, interest will continue to build at your usual interest rate during the payment holiday and the total amount of interest you pay over the term of the mortgage will increase. This will result in a slightly higher mortgage balance than if you’d not taken out a holiday. Your payments may need to then be recalculated over your remaining term, taking this increase into account.

Q Other than a payment holiday are there any other options?

Your lender may agree to you making underpayments, rather than taking a full mortgage payment holiday. They may consider extending your mortgage term in order to reduce your monthly repayments. You may be able to switch to a new deal if you are eligible. You would need to discuss these options with your lender or seek advice from a mortgage broker.

Q I have a mortgage that I pay from my pension income. I can still afford the payments. Should I be asking for a payment holiday?

If your finances are stable and you have no need or reason to stop then it is recommended that you keep paying your mortgage every month. However, if you’re starting to struggle, or have family who need some financial help over the short term, then taking a payment holiday could free up some of your income which can then be used for other things. Don’t take the decision lightly though, as the mortgage payments won’t simply disappear; your lender will want you to catch up in the future. Speak to your lender first, or visit their website.

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