Despite this time of year usually being a slower holiday period, the housing market is still booming and activity is continuing unabated as we move through summer, but what does this mean for you and your mortgage? Here we speak to Babita Nahal for the answers to the most frequently asked mortgage questions.
Are the lenders still providing 10% deposit mortgages?
Some of the biggest banks and building societies have either stopped providing 10% deposit rates or made it harder to qualify for low deposit mortgages over the last few weeks.
Nationwide Building Society and HSBC have made changes so borrowers with less than a 15% deposit will need to purchase houses rather than flats, while other lenders have temporarily pulled out of the 10% deposit market. Some providers have withdrawn their low deposit two-year fixes forcing buyers to take their more expensive five-year rates, while Nationwide announced it is capping any gift towards a deposit at 25% of the deposit amount for those with less than a 15% deposit.
It is possible to get a 10% deposit mortgage but brokers are battling to get these applications through because there is such a limited choice of rates. HSBC, Nationwide Building Society, Bank of Ireland, Metro Bank are the main lenders still providing the lowest deposit mortgages.
Is it possible to get a mortgage if you are self-employed?
Mortgage lenders are assessing applications from the self-employed more closely and they want to know if businesses are experiencing financial difficulties. Applicants will probably have to provide their latest accounts and recent personal and business bank statements. They may well have to answer questions about their trading plans over the coming months and disclose whether they have taken financial help from the government.
Are the lenders still issuing £500,000+ mortgages?
Many of the lenders provide their cheapest rates to borrowers looking for larger loans and they tend to have £999 arrangement fees.
Private banks are keen to lend to wealthier borrower struggling to get mortgages agreed with the more standard lenders.
How much deposit will I need for a buy-to-let mortgage?
Most lenders require landlords to have a deposit of at least 25% to secure a buy-to-let mortgage but there are some options for those with a 20% deposit. Buy-to-let mortgages through the larger banks are incredibly cheap and there is a wide choice of rates.
Have income multiples changed?
Some of the lenders have tightened their affordability calculations although they are still providing up to five times salary mortgages for first-time buyers and home movers.
It is possible to borrow 5.5 times single or joint salaries for some professionals and those earning over £75,000. A selection of lenders still offers six times salary for professionals and those earning over £100,000 but the rates are relatively high.
Which lender has the cheapest rate?
Virgin Money for Intermediaries most competitively priced rate has been lowered to 1.16% and it is fixed until 01 November 2022. After the lock-in period, the mortgage reverts to the lenders 4.34% variable rate and the overall cost for comparison is 3.7% APRC. Applicants will need a 35% deposit to qualify for the arrangement fee is £1,495.
How long is it taking to produce a mortgage offer?
It normally takes around two to three weeks for a lender to provide a mortgage offer although it can take longer if you are self-employed or the provider does additional checks.
One of our brokers has just secured a mortgage offer for a client borrowing £750,000 in 10 working days, it was for an employed couple working for a large company.
What are the mortgage lenders telling brokers?
Mortgage lenders have been inundated with applicants and many of them are struggling to cope with the demand. The additional checks they are doing on many self-employed borrowers and buyers with less than a 15% deposit, along with the reduced number of staff working in their offices are all contribution to backlogs.
Trinity’s brokers and administration teams are doing everything possible to get applications through as quickly as possible. Our specialist contacts within the lenders are more useful than ever, especially when our clients are in a rush to buy a new home or a complication arises.
Babita Nahal, a preferred partner of Love Your Postcode, is one of the UK’s leading independent mortgage brokers. The team have strong relationships with all the providers and will scour the market to find you the very best deal. They deal in all manner of products from first-time buyer to £multi-million portfolios and overseas mortgages. The guys also facilitate exclusive and often complex deals that can’t be found on the high street.
If you’re looking for a mortgage or require some advice please do not hesitate to get in touch with Babita Nahal.
0800 862 0871
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