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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
Help to Buy mortgage pulled because of coronavirus
I was in the process of taking out a Help to Buy mortgage application when the Covid-19 outbreak happened. My partner and I hadn’t submitted our application yet but were looking at properties.
Will we still be able to obtain a mortgage when the crisis is over? We will need a 75% LTV mortgage – but will any be available since lenders have cut them because of pandemic? Also, will our income be enough to cover the mortgage?
We were told, prior to the crisis, we would have enough. However, I have been furloughed so have had my salary reduced by 80%. Any help would be amazing.
Answer
I do think that there will still be options for you post-Covid, so please don’t worry. The only point I would make is that if you are on furlough when you are ready to apply, some lenders may use this lower income rather than that which you would earn if you were at work.
It would be worth speaking to a mortgage broker who will be able to confirm whether this means your numbers still work with your lowered income, or whether you should pause your purchase until you are back at work.
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Question
Remortgage in jeopardy because of Covid-19
My remortgage, due to complete at the end of April, is on hold due to the lockdown because surveys/valuations cannot take place. I’ll be forced to move onto standard variable rate (SVR) next month and my outgoing will double. What rights or help will the government assist with?
Answer
Some lenders are currently using remote valuations rather than insisting the surveyor physically inspects the property. I would recommend looking at whether you can find a new lender who could work this way for you, to expedite matters. A mortgage broker would be able to let you know which lenders are using this system and what their requirements are to access this type of valuation.
Another alternative could be to speak to your current lender and see what rates they will offer you as a new deal – this is known as a product transfer. There is no valuation required to access product transfers, so this would also be a viable option. A product transfer may be more expensive than a whole of market remortgage rate, but should be much cheaper than moving to the SVR. I do hope this helps.
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Question
Are there any alternatives to mortgage holidays?
I recently bought a house with a mortgage and due to recent circumstances will suffer a loss of income. I am confused about my options and in a bit of a dilemma. I have considered a mortgage holiday but feel this is too drastic as I am being furloughed and therefore could return to full pay and work in a month or two. Are there any other options I could take?
Answer
It’s great to see that you are not rushing to take a full payment holiday. My best suggestion is to call your mortgage lender and agree on a partial payment over the next couple of months – where you pay a reduced amount which is within your temporarily lower budget. Not only will this help your cash flow, but it will also have a lower impact on the overall mortgage increase.
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Question
Remortgage due: Should I hold out for a lower rate?
My Santander two-year fix ends on 1 May. Currently, I am on 1.79%. The best fixed rate I am being offered by Santander is 1.74% for both a two-year and three-year fix. I am wondering should I hold out for a better rate (temporarily going onto their follow-on rate of 3.35%, or go to their ‘best offer’). Thanks.
Answer
I don’t think you are going to see mortgage rates come down any time soon, so I would (and this is just a personal opinion) go with the Santander offering which sounds reasonably competitive.
However, before you do this, I would recommend calling a mortgage broker and asking them whether you could get better by going to a new lender. Depending on how much lower this option is, it may be worth applying for this and accepting a temporary spell on the 3.35% follow on rate… You would just need to do some simple maths to figure this out.
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Question
Debt management plan and mortgage holidays
I am on a debt management plan. Can I have a mortgage break for three months or should I still pay it?
Answer
I do not believe that being on a debt management plan impacts your ability to apply for a mortgage payment holiday. However, if you can pay your mortgage, I would encourage you to so as the holiday simply increases the amount you owe overall, which will indebt you further and ultimately cost you more money in the long run.
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