Coronavirus and mortgages – the facts

Friday, 27th March, 2020
Coronavirus and mortgages

As if all the current panic around Coronavirus wasn’t enough, it seems that a load more has been created in the wake of government’s decision to put the property market on ice by stopping estate agents from marketing new properties and preventing viewings for those already on sale.

If you’re about to apply for a mortgage, in the process of applying for a mortgage or are waiting for a mortgage offer, then you might be concerned.

However, whilst we’re very closely related, estate agents and mortgage brokers are from different families. So much so, in fact, that issues directly impacting estate agents might not necessarily impact mortgage brokers to the same degree, and vice versa.

The currently unfolding Coronavirus property panic is a good example.

Whilst estate agents may be putting viewings on hold for the time being, mortgage brokers such as Complete Mortgages are very much in ‘business as usual’ mode. Not only that, but there’s no need to be overly concerned – and here’s why.

1. Mortgage lenders are still lending

There are countless mortgage applications working their way through the financial institutions at any given time. These need to be effectively managed and processed. Whilst some lenders have reduced application volumes in alignment with their inability to value properties, the wheels of the mortgage sector are still turning. To make the point clear, we’re still working with lenders that are offering mortgages at normal loan to value levels – albeit, where you are looking to borrow above 85% loan to value, then the chances are that there will be a delay with the property valuation.

2. Valuations are being delayed, not dismissed

If you’ve applied for a mortgage and are awaiting a valuation, then it will be on hold until things return to normal. However, just remember that everyone is in the same boat, so you’re not at a disadvantage.

3. Extended mortgage offers are now the norm

Already received an offer, but not yet exchanged? Don’t panic, it’s highly likely that your lender will extend the mortgage offer by up to three months to offset any fallout from Covid-19. This has effectively been rubber-stamped following a joint statement supporting the move by UK Finance and the Building Societies Association, too. These are exceptional times and everyone – even the lender – is doing their best to adapt to them.

4. Get ahead of the curve

And no, we don’t mean the much-debated Coronavirus curve. Many people would have been ready to apply for a mortgage before Coronavirus hit. There will also be many people who have decided to move forward with buying a house during the crisis. When balance has been restored, pent-up demand for mortgages will result in a huge influx of applications.

Whilst property viewings might be on hold, your mortgage application needn’t be. Our view is take advantage of a moving mortgage market now and get your application underway so that when the dust has settled, you don’t have to compete with other people frantically looking to get a post-Coronavirus mortgage deal.

Complete Mortgages is a Guildford mortgage broker that specialises in a wide range of mortgage products, from first time buyer mortgages and buy to let mortgages to adverse credit mortgages and equity release. Whether you have general Coronavirus mortgage concerns or are ready to apply for a mortgage, contact the team on 01483 238280 or email info@complete-mortgages.co.uk.

By Mark Finnegan, Director at Complete Mortgages


How is Coronavirus affecting mortgages?

Friday, 13th March, 2020

There’s nothing like an interest rate cut to get people to sit up and take notice (not that people aren’t already on high alert following the daily stream of news surrounding Coronavirus).

However, an interest rate cut does generally signify some kind of issue. Or, at the very least, provides a signal that something isn’t as it should be.

It’s also quite polarising. On the one hand, you have savers – possibly even those who’ve paid their mortgage off – who will have rolled their eyes at the fact that their savings are no longer earning as much money as they were only a few days ago. 

This also applies to those who’ve recently entered fixed rate mortgage deals, who are likely to experience a period whereby they’re potentially paying more than they would have on non-fixed mortgage deals.

On the other hand, there are those on tracker mortgages who will no doubt welcome a period of cheaper monthly mortgage payments.

Either way, the link between Coronavirus and mortgages is certainly being felt – and not just by homeowners, either. As a team of Guildford mortgage brokers, we are adjusting and adapting our approach to mortgage applications on a daily basis, too.

Negative points aside, and without trying to sound too opportunistic, Coronavirus does present an opportunity for those applying for a mortgage or who are thinking about remortgaging.

As the Bank of England’s interest rate has been cut from 0.75% to 0.25%, lenders are now likely to reduce their mortgage rates, too. Complete Mortgages predicts that any reduction by lenders isn’t going to reflect the entire 0.50% base rate cut, but probably somewhere in the region of 0.10% instead. Of course, rates may not drop at all and this, in part, depends on how long the Coronavirus lasts and how widely felt its impact is.

However, just as those keeping a keen eye on the stock market are waiting to buy back in at the right time, our advice would be to keep in touch with your Guildford mortgage adviser (and by that we mean us) to find out just how low fixed rate mortgages go before committing to a 2, 5 or even 10 year fixed rate mortgage.

For the latest mortgage advice and Coronavirus mortgage updates contact the team on 01483 238280 or email info@complete-mortgages.co.uk.

Note: those currently in the mortgage application process with Complete Mortgages should not be concerned about disruption of service. All of the team are ready and fully equipped to work from home should that become necessary.