Wednesday, January 27th, 2021
As the COVID-19 pandemic continues to dominate and influence the exceedingly difficult and uncertain times experienced around the world over the last 12 months, here at Caboodle Financial Services we have noticed that when looking for their “ideal mortgage” many potential homeowners and/or movers have been impacted, not to say frustrated by current lending criteria.
Clearly many factors will influence the decision mortgage lenders make when assessing whether to offer a mortgage or not but, above all, one factor, the Coronavirus Job Retention Scheme (Furlough Scheme), has had the most impact. This is because furloughed employees (or indeed anyone whose usual remuneration structure has been significantly impacted by COVID-19) are viewed differently by lenders when assessing risk.
When a person has been or is impacted by one or all the Furlough Schemes, the main restriction in play is that most lenders will not lend until the furlough period has ended and an employee has returned to work on a full-time basis. Furthermore, in many cases, variable pay such as overtime and bonuses they were previously getting are also excluded when mortgage lenders are assessing what level of mortgage can be provided.
The various Furlough Schemes provided by the government have clearly underpinned a fragile economy and labour market and, given that many businesses are limping through and only keeping employees on their payroll because of government support, the ongoing concern for lenders is what the true impact will be when these schemes end.
Furlough is not the only factor affecting whether somebody can get a mortgage or not and, if they can, for what amount. For example, many people took mortgage payment holidays, and this may also be viewed as an increased risk from a lender’s perspective.
Other factors include the impact that COVID-19 may have had on self-employed incomes, together with the potential for missed payments and any resultant adverse credit, all of which will either individually or collectively combine to affect the outcome of any mortgage application.
With all this in mind, these are just a few of the many reasons people may now choose to use a specialist mortgage broker in their quest to find the mortgage they need, be it to purchase a new home, remortgage an existing property or take the first step into the buy to let investment arena.
Experienced mortgage brokers like ourselves are up to date with all the changes and criteria restrictions currently being applied and can therefore navigate the maze of potential options to determine the most appropriate mortgage lenders given each client’s circumstances and borrowing requirements.
To check out what some of our clients think of the first-class service they received, simply click our website testimonials link HERE.
Following this, for some no-obligation expert mortgage advice, just contact our friendly team here at Caboodle Financial Services of Sutton Coldfield, Birmingham on 0121 308 9114 today to discuss your individual circumstances and requirements with one of our specialist mortgage advisers, or alternatively, please complete our online enquiry form by clicking HERE.
We very much look forward to hearing from you, but in the meantime please stay safe!
Caboodle Financial Services Ltd
Mere Green House
46-48 Mere Green Road
West Midlands B75 5BT
Telephone: 0121 308 9114