Coronavirus: what it means for your mortgage

Coronavirus: what it means for your mortgage
Whilst fighting the spread of coronavirus is everyone’s top priority, those who are hoping to move or remortgage are understandably worried about whether their plans will be able to go ahead.

Many lenders have already been forced to put lending restrictions in place, as they are not only faced with staff shortages and difficulties carrying out property valuations, but also with huge numbers of existing customers enquiring about mortgage payment holidays.

Here’s what you need to know about how the pandemic is affecting the mortgage market, and the impact it might have on your chances of getting a mortgage or remortgaging.

Have lenders stopped offering mortgages?

Although some smaller more specialised lenders have temporarily stopped lending, many lenders are still offering mortgages to both new and existing customers.

However, some have withdrawn most of their deals that were available to those with smaller deposits, or who have a limited amount of equity in their homes if remortgaging. This is because of the difficulty in conducting valuations and to manage the flow of applications they have coming in with their reduced staffing levels.

Those with a larger deposit or amount of equity should still find a wide choice of deals available. Physical valuations are not currently being carried out though because surveyors cannot visit properties, which may delay your application. Some lenders may be able to use automated or desktop valuations remotely, although this is less likely to be possible if you’re borrowing a higher percentage of the property value.

I’ve already applied for a mortgage – will my application go through?

If you applied for a mortgage prior to the government’s lock down, in many cases your application should proceed as normal, although this will depend on your individual case and the lender involved.

Some mainstream lenders have put applications that have already been submitted on hold if they require a physical valuation that hasn’t yet been carried out. As valuers are no longer visiting properties, some lenders are using alternative methods to carry out valuations remotely. Unfortunately, however, these won’t be possible for all properties. If your lender isn’t able to conduct a remote valuation, the processing of your application may be delayed until a valuer is able to visit the property you’re buying.

Your lender or case manager will be in touch to advise whether your lender is able to do a remote valuation – if they can, your application should be able to be processed as normal.

I’m buying a house – should I go ahead?

The Ministry of Housing, Communities and Local Government has now given clear guidance to those buying or selling private residential homes, stating that if you’re able to delay the purchase of your property, you should.

Mortgage lenders are working to offer those putting their plans on hold a three-month mortgage offer extension so that they can move at a later date.

You can find out more here

Am I able to remortgage?

Although there are a number of changes happening in response to the coronavirus pandemic, the market is still open for both new and existing customers.

If you’re looking to remortgage this means you can still shop around for a better deal, although your chances of being accepted will be higher if you have a significant amount of equity in your property.

You don’t necessarily have to have as much as 40% equity and some lenders are prepared to lend a higher proportion of your property value. Get in touch with L&C if you’re not sure which remortgage deals you might be eligible for. We’re constantly being updated by lenders, so we can tell you exactly which deals are available.

L&C can also advise you on the deals that lenders are offering to their existing customers. We’ll look at what yours might be able to offer you and compare this against deals available in the wider market so you can be certain you make the right choice.

I’ve already submitted my remortgage application – is there anything I can do to make sure it goes through?

If your remortgage application is already underway, make sure you get any paperwork required over to your solicitor as soon as possible. This can usually be done by logging onto their online portal, or you can submit their initial questionnaire and signed instruction by email.

If you’re worried about finding a witness to watch you sign your mortgage deed given the requirement to be socially distant, you might want to consider asking your neighbours if they can help. You may be able to sign the document outside their window and then post it through their letterbox for them to sign. Make sure both you and they wash your hands thoroughly before and after doing this. Once signed and witnessed, the deed can be sent back to your solicitor.

You might also want to consider registering with the government’s Verify service, which is a secure way to prove who you are online. Some lenders including Barclays, Nationwide, HSBC and Santander, along with several solicitors, can accept electronic signatures if you are registered with this service.

It usually only takes around 15 minutes to register with Verify and once you’ve done this, your conveyancer will send you an email with instructions on how to access the ‘Sign your mortgage deed’ service from HM Land Registry. If you’re able to use this service, it means you don’t have to wait for paperwork to be sent to you, and nor do you have to sign it in front of a witness as it can all be done online.

If you need any help, get in touch with L&C today and we can talk you through all the options available to you.

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