A note first about coronavirus & mortgages
The current situation regarding the coronavirus outbreak poses challenges for mortgage lenders, brokers and borrowers. For existing mortgage holders, the 3-month payment holiday provides some relief. However, a payment holiday may not be the best option for you, for example your lender may be willing to switch you from a repayment to an interest-only mortgage, or if you have an overpayment reserve you may be better to consider a period of underpaying. You should therefore always seek advice before making any changes. It’s also important to remember that you will not automatically be granted a payment holiday, and you will have to apply.
The exact impact on borrower’s credit reports is not fully clear at the time of writing, although we expect there to be none, but as ever ignoring the situation is never the best option. As the situation is constantly changing, specialist mortgage brokers will be especially well-placed to provide information as their close relationships with lenders means that they have access to the clearest, most up-to-date information available.
Currently new applications appear to be affected most, for obvious reasons including the inability for valuations to be made and the reluctance of both sellers and buyers to facilitate viewings (although many have setup video viewings). There is still scope for remortgage and second charge mortgage applications. However this is a constantly changing and fast-moving situation.
For the self-employed, freelancers and contractors the position was particularly uncertain, not least due to concerns that many will have about their income, however the recent announcement from the UK Government regards up to £2,500 a month being available as a grant for the self-employed should help. Along with similar support via furloughing for employees, the only stumbling blocks are whether these constitute a change of job circumstances. Again talking to a specialist broker, with extensive specific experience working with borrowers like you, can pay dividends when it comes to finding the best choice in your circumstances, in particular if you are considering a remortgage or second charge mortgage in order to access additional capital.
The suggestions in the article below all centre around online or other options that do not require face-to-face contact with a broker.
Mortgages can be complicated. Despite the numerous ads that invite you to apply ‘quickly and easily’ online, for many people the process is anything but quick and easy. Now more than ever, economic uncertainty means that every potential homebuyer or remortgage applicant can find applying for a mortgage or remortgage less than straightforward. Complications mount if your circumstances are not simple.
Difficulties can arise because of anything from the way you earn a living, and construction material of your property, to the health of your credit file. When difficulties do arise, you want to make sure that the advice you receive is tailored to your situation. Finding specialist information will be key. So where can you find the help you need from a reliable source?
Searching for information online is often the place that people start. The attraction is clear. You have instant access to a seemingly bottomless pit of information, from a wide range of ‘experts’. However, the sheer volume of the information available is often the problem, it can be difficult to sift through and decide what is really relevant to you.
In addition, who are these ‘experts’? In general, if the information appears on the website of a reputable broker or lender, or indeed on a trustworthy website like this one, you can be confident that it is accurate. Again, you have to take it as ‘general’ information, that may not be applicable in your circumstances. In fact, many of the most dependable sources will be clear that you should always seek personalised advice.
Be wary however of other sites where it is not immediately apparent who is giving the advice, or what their credentials are.
You also need to be alert to when the information you are reading was posted. The mortgage market is a particularly fast-moving sector, so be aware that something posted even just a few months ago, may no longer be current.
Online Searches For Mortgages In short
- There’s a lot of information available
- You can search from home
- You have access to experts from across the country
- You don’t know how reliable the information is
- The abundance of information may mean that it’s difficult to find what you want
- Information could be out of date
Another source of information can be online forums. In addition to giving you the same type of information that you might see on other sites. The forum format has the added advantage of letting you ask specific questions which outline your personal situation.
Given what we have already said about much information not being tailored to you, this could appear to be a major plus point. However, again you should be cautious and bear a number of things in mind.
Firstly, one of the major appeals of forums – the fact that they allow you to remain anonymous – are also a drawback. If you are anonymous, so are the people giving you advice. Essentially you have no way of knowing whether the people who answer your queries have any specialist knowledge at all. While in the main most forum users just want to share their experiences, and are eager to help, that is no guarantee that the information will be accurate or useful. Or indeed that it is not being provided by someone who is touting for trade. Be very wary if anyone askes you to contact them privately.
Secondly it is possible that you will get a distorted picture of what is available. Either thinking your situation is much better or worse than it is. Finally, any advice you get can only ever be as good as the questions that you ask, or the information that you give.
If you do want to use a forum, look for an online mortgage forum that is committed to removing inaccurate information and providing support via qualified mortgage experts and brokers.
Online Forums For Mortgages In short
- You can remain anonymous when you ask for advice
- You may be able to get information from someone whose circumstances are like yours
- You can ask for information specifically about your situation
- You can’t be sure who is giving you information
- You don’t know how accurate information (unless you use a forum that removes inaccurate content)
- Other people’s experience may not mirror yours, even if their circumstances seem similar
By far the most reliable source of information and advice about mortgage and remortgage products are, as you would expect, mortgage brokers. As well as knowing that you are receiving advice from someone who is qualified, you also have the security of having the protection that comes from using a regulated service. However not all mortgage brokers are created equally. Different brokers have access to different lenders, and specialist mortgage brokers have specific market knowledge around products that are most suitable for borrowers with more complex situations.
When you come to choose a broker look for one who has whole-of-market access. Some brokers will only recommend mortgages from a ‘panel’ of lenders, so although they will still be giving you trustworthy, professional advice, the mortgage products available to you will be limited.
As we indicated in the opening paragraph, there are a number of situations which may mean that it will be more difficult for you to find a ‘standard’ mortgage. Many self-employed people fall into this category of borrower, as well as people in apparently secure professions such as healthcare or other emergency services, where income is unpredictable due to overtime or other unusual payments.
In these cases a specialist self-employed, NHS, or unusual circumstances mortgage broker will be able to provide invaluable support and information. They will have extensive experience of working with lenders willing to lend to less typical borrowers, and so will know where to place your application for a mortgage or remortgage for a greater chance of success. Specialist brokers with access to the whole market will also have access to broker direct-only products, that aren’t available via any other route.
In addition to unusual circumstances surrounding your occupation, employment status or the type of property you are buying, any adverse credit history may make finding a mortgage trickier. You may be able to find advice online, but there are so many degrees and variations of adverse credit that may be viewed as bad credit history by one lender but not another, that you may not be much wiser than before you started looking! Again a specialist bad credit mortgage broker will be the best place to get up-to-date information.
In some cases specialist and adverse credit mortgage brokers will able to provide advice and information that will enable borrowers to secure mortgages or remortgages from high street lenders at better rates than you expect. The key is having the experience and market knowledge to make this happen.
Specialist Mortgage Brokers In short
- Experts in your specific mortgage circumstances
- Access to the whole market to get you the best deals and mortgages that are not available to the general public
- They know which lender will accept you based on your personal circumstances and credit/personal history
- There will usually be fees (though this is often off set by getting you the best deals available)