During the past week, the mortgage market has been heavily impacted by the coronavirus. Everything has come on a bit fast so we think that it is best to catch you up to speed. We aren’t trying to scare you, we want to explain what is happening to the mortgage market and do our best to help you through the problems you may be faced with during the next tough few months.
The main problem for the mortgage market is that surveyors and mortgage valuers can’t go out and visit properties. This means that the whole property market is being put on hold. Lenders need to know what they are lending against so need some sort of valuation before accepting your application.
Some lenders rely on AVM’s (Automated Valuation Model) for valuations on a property. This is basically a way for lenders to receive a valuation without actually going out to the property. However, this is only used when they don’t need to send someone out to physically look at the property; these types of mortgages are restricted and to lower loan-to-values only.
During the last couple of days, as of March 28th, some lenders have been restricting their maximum loan-to-value down to 60%. So, they are continuing to process these types of applications but not necessarily ones at higher loan-to-values.
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 So far, no mortgage offers have been withdrawn, we think that it is just a waiting game at the moment, lenders are just putting everything on hold before rushing into accepting more mortgages.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 about Mortgage Payment Holidays, we want to remind you that you should only take one if you really need to. Do your research, talk to a Mortgage Advisor in Hull, evaluate your options and see whether it is the right thing for you.
It is more than likely that they will extend the period of your mortgage anyway so it could be better to just hold off. You should contact your lender if you are questioning your ability to meet your monthly mortgage payments. If you decide that this is your best option, lenders are asking for you to get in touch online due to the sheer volume of calls they are receiving.
If you are going to request a payment holiday, check that it won’t affect your credit rating or mark any arrears against your account. Also, don’t just cancel your direct debit and remember that you will need to seek permission from your lender to take a payment holiday.
The main thing is not to panic. We are here to help you with all of your mortgage problems and get you and your mortgage through the next couple of months. At some point in the coming weeks or months, someone is going to press play again. We will all be back to normal in the given time.
You can still get in touch with a Mortgage Advisor in Hull at Hullmoneyman 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.
This article was originally published on 30/03/2020 and as of 20/05/2020 the property market has now resumed and this information has become outdated. Everything was 100% accurate at the date that this article was published.