Covid-19 has been a difficult time around the UK for all of us. It’s been more than testing for businesses, and the government continue to try and support businesses as much as possible. Families are divided whilst new rules are put into place restricting crowds of more than 6 people, and many people have struggled mentally with no clear end date in sight for this pandemic to disappear
Mortgage lending has been no different and has been heavily affected by the current pandemic, with lenders becoming stricter with what they can accept as suitable income, and restrictions for buyers based on your deposits.
The income side of things perhaps the more of the challenge tan the deposit, as many self-employed business have seen periods of distress since March. Lenders have recognised this and have implemented precautions to ensure that income levels haven’t dropped ad that the lending amount can be supported whilst there is no end date for this pandemic. Business bank statements will now almost always be asked for and the big question will be asked…. “has your business been affected by Covid-19?”.
Deposits are also a major factor in the new normal lending criteria, as before it was possible to obtain a mortgage with as little as a 5% deposit. Gone are those days and now the 10% market has been hit as lenders prepare for the country to be hit by the full effects of the lack of activity due to working from home and national lockdown. Many lenders were unable to keep up with the demands of mortgage applications and their service levels were hit greatly. The safety of surveyors carrying out property inspections on behalf of these lenders meant that many applications were put on hold and this created a massive backlog in timescales, with lenders unable to offer a mortgage without having a suitable valuation carried out.
Specific criteria is now required with a 10% deposit, such as products being exclusive to first time buyers, a maximum property value and flats being difficult to mortgage in the current climate. This being said however does not mean that it is not able to be done, and at TR Financial we are here to make sure we can run you through all of your options to make sure you can make the right decision as to what is best for you.
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