The Impact Of Covid-19 On Mortgages
The world today looks very different than it did just 8 weeks ago. Entire industries that were thriving are now on the brink of collapse, the workforce has gone digital and no one has ever spent so much time at home. Over the last few weeks a lot of our clients have got in touch to ask about how Covid-19 will impact the mortgage market, and what they should be doing to make sure they are as in control as possible. So today we’re going to answer a few of the most frequently asked questions about mortgages in the time of Covid-19.
Can I Still Apply for A New Mortgage, Or Remortgage?
On the whole, banks and lenders are still happily taking new applications for mortgages and remortgages. In fact, there’s still a lot of fierce competition in that area, with lenders often fighting for customers! And when it comes to remortgages, now could be one of the best times to look at it. Interest rates have never been lower, so those with more unfavourable rates are now switching to new lenders or just new rates with their existing lender.
Having said that, it’s more important now than ever before that you ensure you can afford the repayments before you start any new application.
Is Now A Sensible Time to Remortgage?
As we mentioned, interest rates are as low as they have ever been, so from that standpoint remortgaging might seem like a great idea. But the truth is we don’t have a magical crystal ball, and there is no way for us to be able to tell you what the future holds, or what the financial climate will be when this pandemic is finally over. But what we can say is that fixing your mortgage rate is often a great way to create certainty about your monthly outgoings, and with rates as low as they are, now might be a prudent time to take a look at your mortgage and see what better deals you could get.
I’m Not Sure If I Can Afford My Monthly Repayments Right Now. Should I Be Worried?
This is a really common question, and we know just how much it’s been plaguing everyone with a mortgage right now. No one wants to deal with the idea that they have been furloughed from work and are now struggling to afford the roof over their head. But the government know this, and they’ve put some plans in place to support you. The main one is the mortgage holidays scheme, which allows you to take a break from paying all or part of your monthly payments for up to 3 months. This should give you some breathing room and make the next 3 months a bit easier to deal with. However, you should remember that this is a deferral, not a free pass. Taking up a mortgage holiday may increase the amount you owe, or mean you owe a larger chunk in one go at the end of the 3 months, depending on the terms set out by your bank. So, always make sure you read the fine print, and if you can keep paying your mortgage comfortably now, do so, and only take the holiday option if you really need it.
Should I Be Worried About the Housing Market?
Right now the Covid-19 situation hasn’t really had much of an impact on the housing market. In fact, the latest Price Index from Rightmove shows quite buoyant figures for March. These figures may not take into account the latest impacts of Covid-19, but it is a very positive sign. Of course, it is possible that some will delay putting their houses on the market until there is more confidence in the financial situation, but there will still be plenty of people needing to move for all sorts of reasons.
Will My Mortgage Application Be Delayed?
Part of this depends on the lender, but generally speaking mortgage applications seem to be being processed at the usual speed. But with some banks having lower staff numbers, and more potentially suffering as the pandemic goes on, this may change. With this in mind, if you’re planning to remortgage or take out a new mortgage this year, we’d recommend starting the process slightly earlier than you would usually need to, just to make sure everything is in place when you need it.
It’s a time of great uncertainty for everyone, but the team at Chilvester Financial are dedicated to providing you with as much information as we can. We might not have all the answers, but we are here to listen, give advice and help support you as much as possible. If you would like to have a free, no obligation chat with one of our financial advisers (via phone or video call of course), then just get in touch today.