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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk
Tel: 0345 345 6788
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Question
Being forced onto SVR during a remortgage because of lockdown
I let out my flat and have an interest-only mortgage as I rent elsewhere for location necessity. My proposed new lender would not do an automatic desktop valuation and it required a survey, which was obviously not allowable at that time.
I should have switched deals at the start of May, but the survey is only now scheduled for 1 July 2020.
This means I’m liable for at least three or maybe four months on standard variable rate (SVR) which seems grossly unfair as it’s roughly twice the amount.
Will any lenders be considering freezing their client’s repayments onto the same deal instead of putting onto SVR while in lockdown?
I also am self-employed, out of work and not applicable for any help from the government, which has basically ignored my industry sector.
I have remortgaged to switch deals but also I have now been forced to take equity from my property to cushion myself with no set date to a return to normal.
My broker advised to request a mortgage payment holiday from my existing lender which has been granted but this still essentially means a delayed three months’ worth of double my monthly outgoings when my redemption statement comes when the mortgage offer arrives in post survey.
I had all my other documents ready and the mortgage deed signed so I should have switched and the valuation was the only barrier.
The valuation was not excessive and certainly in line with a market value so I consider it unreasonable they are imposing this. Is there any redress to this? I feel my broker has shrugged her shoulders on this.
Answer
I am sorry to hear your story – it sounds like the last few months have been incredibly hard for you.
I am afraid that lenders will not be either partially reimbursing payments which moved onto the SVR during this period or extending existing mortgage deals.
You may have been able to take a new deal with your current lender by way of a product transfer, but it sounds like this may be too late for you to have any real benefit.
Regarding a full valuation needing to take place on the remortgage, lenders were not necessarily offering a desktop valuation as a matter of course. Some properties would be classed as acceptable for a desktop and others not – this varies between lenders.
The advice to brokers from the lenders has been to submit applications, and they would subsequently advise whether a desktop survey would take place – this has made things tricky for both brokers and mortgage applicants.
I am hoping at this point your broker would have given you the option to try a new lender and also spoken to you about a product switch with your existing lender?
Sorry, I appreciate this is not necessarily the answer you are looking for.
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Question
Prospects for the buy-to-let market
I recently made my final mortgage payment on my home and am pleased to say I am mortgage-free. However, I am thinking that it might be a good idea to start investing in a buy-to-let and am currently looking at the holiday let market.
I wondered, however, whether now might be a bad time to invest in a property. Should I wait until the pandemic and its impact has died down or are there opportunities in this kind of market? I know rates are low on BTLs but might they creep up?
Answer
Well, that is the million-dollar question! House prices seem to be holding up at the moment as we see a post lockdown bounce.
There are predictions that there will be a dip towards the end of the year, so it may be worth holding off for a few months.
However, this is a gamble as the property market does not always do what people think it will! A buy-to-let should be treated as a mid-to-long-term investment, due to volatility in house prices, so think of it as such.
Although making a good return is important, this should be done over the longer term rather than aiming for a quick jump up in value.
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Question
Can I remortgage whilst on furlough?
I wonder if you can help me. I am currently on furlough but gain a steady income from a buy-to-let property which I have had for several years. I am due to remortgage on this but I am concerned about whether my current financial situation will impact this.
I presume, providing my tenant is paying the rent I will be fine, but I am still a little concerned in the current economic climate.
Answer
Being on furlough is ok as you are still employed on, I am guessing, a lower income. It is this income that lenders will look at when ascertaining whether they will want to lend to you.
However, assuming you are up to date on your mortgage payments and can demonstrate your rental income by way of a tax return, I do not think you will have any issues in getting a mortgage.
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