The current market scenario in the mortgage industry (as you know) is already in stress due to covid-19. The market is uncertain, however, has not surrendered yet. The existing applications are under process according to the previous rules and regulations.
The new borrowers may have to wait a bit more as the mortgage companies are busy like Shinemortgages.co.uk. They want first to calculate the risk level prevalent in the lending market. Before they gather the courage to trust the new applicants in this severe and economically unstable time, they need to work on their calculations.
LTV rates, income assessment, everything is different now
The new alterations in the LTV by the lenders are sure to show the effect on the borrowers’ mortgage decisions. Besides, the changed policy (for a temporary period) on income assessment is there to intensify the feeling that things are not the same now.
A look at the current mortgage rates can help to calculate the future possibilities of the market. If you also want to buy a home or a property, you should know the latest mood of the market.
Get to know the LTV and SVR standard variable rate offered by varied lenders –
The current rates
|Coventry Building Society||50%||4.49%|
The rates of the same lenders in 2019 to facilitate comparison
|Coventry Building Society||80%||3.75%|
The outcome after the contrast
As you can see, there is a significant difference in the rates and majorly due to the LTV.
- When the loan to value is high, the borrower needs to work less on the deposit.
- The lower LTV means the fund seeker has to gather more to offer a more significant deposit
The actual issue of the current situation resides here. Most of the renowned lenders have taken back their higher LTV mortgage products, and that is a big concern for the borrowers.
Lenders want to know about your income during the lockdown
Many lenders want the borrowers to have at least 25% of equity as then only they can borrow funds. The banks have also asked the broking companies to mention the actual income in the application form. After the lockdown situation, many people have been furloughed by their company.
A mortgage broker online in the UK has to mention the type of income if the applicant is getting the regular salary or taking the furloughed income. This drastically affects the approval decision on the mortgage application.
The mortgage companies will not count the temporary benefits like bonus, commission, rewards as part of the income. As the time is uncertain nowadays, the lenders count only the regular income.
The days are challenging, and the future is unpredictable. But the revival efforts are going on. However, the suggestion is that people should work on saving more. Maybe today they cannot get the mortgage due to their income issues, but when the life comes back to normalcy, at least there will be a significant deposit amount. The need is to own the skill of prediction and get on the property ladder as safely as possible.