Yesterday the press reported that the UK mortgage market is in ‘lockdown’. The situation isn’t as clear-cut as the headlines make it out to be – we’re here to allay your concerns and answer your questions.
Can I still get a mortgage?
At the time of writing, lenders such as Nationwide are temporarily pulling out of new deals with first time buyers or current homeowners with little equity in their homes. The move will not affect all mortgages – those applying for mortgages with 25% equity or more will still be considered.
Other lenders such as Barclays, Halifax, Santander and Virgin Money will only consider applications with 35-40% equity or deposit.
You should speak to a mortgage broker/advisor to determine your eligibility.
Will my existing mortgage be affected?
No. Lenders have assured existing applications will not be affected, so if you already have a mortgage offer you can continue to progress your purchase and/or sale. However, if your financial circumstances change as a result of the coronavirus, you must contact your mortgage lender to ensure the offer remains valid.
Although the government has issued guidance encouraging buyers and sellers to delay moving dates, you do not need to put the process on hold altogether. You can still progress your purchase/sale so that you’re ready to move once lockdown has been lifted and it’s safe to do so. Those purchasing unoccupied properties can continue with their move if they follow social distancing guidelines.
Why are lenders limiting mortgage applications?
Mortgage lenders require physical valuations for properties with less than 40% equity. As the UK is currently in lockdown, valuations cannot be carried out as usual.
Additionally, Nationwide is putting the temporary measures down to the sheer volume of enquiries about existing and ongoing mortgage applications. The move will enable them to provide a better standard of customer service during the current COVID-19 pandemic.
For more information and advice, please contact our team who can put you in touch with a mortgage advisor.Back to Blog