[col type=”one-third”]
Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk/
Tel: 0345 345 6788
[/col]
[col type=”two-third last”]
[hr style=”single”]
Question
Can I still take out a mortgage?
I have heard there are problems getting mortgage applications process because of the stamp duty holiday. We are looking at moving house and are currently ‘viewing’ properties but I am reading there are lots of hold ups.
Can we realistically take out a mortgage or are we in for a long wait?
Answer
Well, it’s certainly been busy! Lenders were definitely overwhelmed with applications, and for a time, some fell behind with their processing.
That said, we do seem to be over the worst, and things are improving by the day; some are back to normal while some are still a little slower than pre-pandemic.
My best advice would be to check lenders’ websites where they usually publish the expected service time and see which ones are likely to meet the deadline.
A broker will also be able to help with this as they should have an up to date record of all the lender process times to hand.
[hr style=”single”]
Question
Furlough – will it impact my mortgage application?
I had been planning to buy my first home last year but when the Covid-19 pandemic began I was put on furlough (I work in retail). Fast forward a few months and I was back at work and then I have been furloughed again in line with lockdowns 2 and 3.
I have £12,000 saved up to place as a deposit and the flats I am viewing are in the region of £190,000. Obviously my salary is irregular! Do you think I will be eligible for a mortgage or will my furlough status work against me?
Answer
I’m sorry to hear this; it must be a very unsettling time for you. Some lenders will accept applications from furloughed applicants, although they will only consider your furloughed income rather than your “normal” salary.
You can expect a lot of questions (more than usual) around your employment and income as lenders try to assess that you’ll have a job to go back to (horrible to say but that’s the reality of it I’m afraid). Hopefully, you’ll be back to work later this spring, and this will make the process a lot easier for you!
[hr style=”single”]
Question
Do lenders consider other assets in mortgage application?
I am after some advice please on my eligibility for a mortgage. I am ‘self-employed’ work in a creative job where my income can fluctuate quite dramatically from one part of the year to another. This is not helpful for me in terms of taking out a mortgage, as such I have been putting it off for years. I am fed up with renting, though, and would love my own home.
So, in the last tax year I earned £65,000, the year before that it was £52,000 and in the next tax year – thanks to Covid – it’s going to be pretty low, more like £22,000.
I do, however, have £150,000 tied up in shares which I received an inheritance I want to keep as a safety net for the future – for example, should my children need to go to university etc.
Would the fact I have this money help support a mortgage application? My parents can also help me out financially where needed in emergencies.
Answer
Lenders look very closely at current self-employed income and accounts and unfortunately, having contingency funds set aside will not help you borrow more.
It’s going to be challenging for many self-employed people whose income has been impacted by the pandemic, and it might be the case that putting your plans on hold for another year will be better in the long run.
Alternatively, cashing in some of your shares to boost your deposit may give you access to more mortgage options. I’m sorry I can’t offer you more positive advice right now!
[hr style=”single”]
Question
How much can we borrow?
My husband and I earn £85,000 per year between us. My salary is £52,000 and my husband’s is £33,000 – these are both ‘before tax’. How much, therefore, would we be allowed to borrow on this joint salary?
Also do different mortgage lenders use different calculations or do they all follow a standard method? We have £13,000 saved for a deposit at the moment. If we can find out how much we can borrow, we can start working out which homes to look at! At the moment we are searching in the dark.
Answer
So yes, every lender is slightly different but will generally calculate affordability based on your income, living costs and other financial commitments.
As the calculations can vary, a mortgage broker is very useful in this situation as we can crunch the numbers more quickly.
However, as a rough guide, I’d expect you to be able to borrow 4.75x your combined income which would be c£400,000, assuming you have no other debt.
As I said, a broker will give you a more exact figured based on a bit more information, but I hope this helps.
[hr style=”single”]
Question
Are banks offering mortgages to furloughed staff?
Myself and my girlfriend are first time buyers about to put down a reservation on a new build property. However, I am going to be furloughed. As a zoo keeper I will still be working and my company will top the 20% up, so my salary will not change, though I understand banks will not see this as ideal.
Are there still banks offering mortgages with the aid of things like your employer stating a return of work date etc?
My girlfriend is having her permanent contract finalised as she was on a zero contract prior to passing her probation (all parties aware of this) so can’t give any specific figures for her salary.
I appreciate furlough is very much dependant on what the banks criteria are, just would like to know as of present if banks will still potentially consider applications with furlough involved.
Answer
I am sorry to hear that you’re on furlough; whilst this will undoubtedly be a temporary arrangement, I know that it can still be worrying.
The good news is that some lenders will lend to applicants on furlough, based on their furlough income. As long as you are comfortable with that, and the numbers still add up, the mortgage will remain affordable, so I see no reason you can’t pursue your plans.
I hope this helps and good luck!
[hr style=”single”]
[/col]
