Mortgage affordability (post-lockdown)

During the coronavirus lockdown, many aspiring homeowners have seen their prospects dashed as lenders have pulled thousands of mortgage products from the market.
Between March and May, lenders withdrew 2,656 mortgage products from the market as the Bank of England (BoE) slashed interest rates in a bid to buoy up the struggling economy. Many of these were high loan-to-value (LTV) products aimed at buyers with smaller deposits.
Hope returns?
The mortgage market remains tentative in the face of economic uncertainty, with lenders reintroducing 90% LTV mortgages in early June, only to withdraw them again weeks later as demand surged.
However, sources suggest that providers are keen to return to high LTV lending as soon as possible. Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), commented: “Lenders will be eager to return to this area of the market when service levels allow. Lending at 90% and above is vital for first-time buyers and borrowers with smaller deposits, and the pent-up demand we are seeing is certainly a positive sign for the mortgage market as we emerge from this crisis.”
Making yourself attractive to lenders
If you’re looking to get a mortgage on a lower deposit, it may be more difficult in the current climate – but it’s not impossible. Here are some tips for making yourself more attractive to lenders:
Get acquainted with your finances
Lenders want to see that you’ll be able to make your mortgage repayments, so your credit history needs to be as clean as possible. If you are struggling to keep up with credit commitments due to coronavirus, speak with your provider to find a solution that doesn’t harm your credit score.
Save as much as possible
Many people are spending less during lockdown, so use this opportunity to save as much as possible towards your deposit. The higher your deposit, the more attractive you’ll be to lenders.
Sort out your paperwork
Getting a mortgage requires a lot of paperwork, so it’s wise to gather vital documents such as your P60, three months’ payslips, a utility bill, your passport, etc. so that you’re completely ready for your lender. It’s also important to ensure you’re on the electoral roll.
Keep records of your self-employed earnings
It can be more difficult for self-employed people to get a mortgage because their earnings can vary. Lenders will want to see evidence of two or three years of earnings, so keeping good records can pay!
Get in touch
As lenders adjust to the ‘new normal’, things are likely to be unsettled and aspiring buyers might need that little bit of extra help to get a mortgage. We’re here to do just that, so please get in touch.

Your home may be repossessed if you do not keep up repayments on your mortgage

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