Brookson Financial’s Mortgage Advisors Billie and Mike talk through 5 of their most frequently asked questions when it comes to securing a mortgage or investing in a property and how COVID has impacted purchases and remortgages.
Can I get a residential mortgage with 5% or 10% deposit?
At the moment 5% aren’t achievable on standard properties it’s important to note that. 5% on new build properties is do able if you’re using the help to buy scheme from the Government. So typically, it’s 20% from the government 40% if you’re in London and then you can put the 5% contribution down yourself. There’s lots of ins and outs of how to buy which we can help with but it’s just sort of a brief note that help to buy mortgages yes with 5%, standard 5% mortgages aren’t achievable at the moment.
Moving on to 10%, so typically known as the 90% loan to value market, you’ve got 10% deposit 90% mortgage. Very turbulent at the moment, we’ve seen a lot of drastic changes enders launched into that market, lenders withdrawing products in that market. The short answer is yes it’s something that we probably will be able to help with, obviously it is dependent on individual circumstances, we have to run through a lender’s criteria and make sure that your you fit that lender’s criteria that have 90% products available at the time when we’re looking to apply, but really the messages at the moment is just talk to us, we’ve got a number of clients that are on a list for when certain products with certain lenders become available they’ll be the first people to know about it when we do they do and it’s all about relaying the message and keeping in contact with clients making sure that they’re up to date and up to speed as we are.
At the moment:
5% standard – no
10% – is something we can help with
Just get in touch and we can definitely run through all the criteria with you.
Have mortgage interest rates dropped?
Another very common question that we get asked at the moment, it’s a difficult one really, I mean fixed rates have remained relatively stable and they’re historically low so you know in reality I think fixed rates are probably what people will go for and would be typically our advice to go that way. There are some tracker rates but they’re not really available as such, it’s all about circumstances I think really, so you know if somebody wants a specific tracker because there’s no penalties, we would use that option. They are available but there’s just not many because they’ve got no penalty charges on them.
So I think we’d probably look at five-year fixed rates, two-year fixed rate is pretty low but again it’s a circumstance thing speak to us about it we always run through the options, it’s very much dependent on loan to value as well at the moment. Deposits are really important, so you know I echo your thoughts on the 5% and 10% but interest rates are low.
Are purchases or remortgages progressing at current?
I mean I know we’re very busy at the moment and purchases and remortgages have been completing and progressing throughout the whole process in terms of lockdown, the majority of the business that we’re working on was remortgages, purchases it was quite difficult to progress because valuations couldn’t be carried out especially physical valuations. For remortgages, people are still coming to the end of their deals, people still need to negotiate new deals with either existing lenders or new lenders which is something we can help with in both instances, we review the market and we would always give you the best advice in terms of looking at your circumstances and finding the most competitive deal for you in your time frame with what you’re looking for.
Obviously with valuations there are quite strict social distance and rules in place at the moment so we are seeing a little bit of a backlog in terms of getting valuations completed which is understandable, obviously the valuers need to be safe, lenders staff need to be safe and ultimately the vendors or the customers that are remortgaging also need to be safe within their home as well so they are taking slightly longer to complete but each lenders are working with different valuation companies as you know it’s a massive spectrum and they’re all working really hard to make sure that they’re done adequately, they’re doing quickly and they’re starting to really start chip away at that backlog now and make sure that cases are progressing as they were previously.
I think we’ve spoken before haven’t we, there was about a hundred thousand backlog of evaluations which put a real hold on the market but certainly over the last two weeks we’ve seen more purchase applications than we have in the last three months haven’t we so they’re definitely starting to pick up things/starting to move in that field, people can go and see properties now, one thing that I’ve noticed.
I don’t know about you mike but estate agents are a little bit more keen to get a decision in principles off people before they allow them to go view a house at the moment just because it seems to be that they don’t really want to do physical evaluations and unless somebody is really quite serious about making an offer or thinking that they potentially will be so again we’re working hard we’re getting the decision and principles done for people we’re making sure that we’re putting them in the best position to progress with purchases at the moment we’re working with estate agents, we can work with solicitors, we really do try and sort of help throughout the whole process and I think it is a bit of a daunting world anyway especially buying a first home so the fact that we’re here to help you to, guide you and hold your hand through the process is more invaluable than ever at the moment and with everything that’s going.
Is now a good time to invest in a property?
Very common at the moment this one, especially to a lot of our clients with Brookson and you know we get one, two, three of these requests a week for information so we can’t really answer the question as such, we don’t know what prices are going to do in property but you know I’ve been in this business a long time I think there’s always money in property whatever people say so it’s having a chat about your personal circumstances, objectives, looking at limited company financials or personal buy to let’s, that’s why we have the good relationship with the accountants that we do
and the integration in that way is very important I don’t think anybody knows what’s going to happen uh in the future there’s lots of views on what house prices are going to do I don’t think they’re going to drop too much but you know there’s always people that are going to say they’re going to drop a lot but I’ve certainly done sort of three applications for limited company buy to let’s this week, I don’t think that’s going to stop so if people have the money to invest it’s quite a safe way to invest I think so I mean what do you think Billie?
Yeah it is really hard to give an opinion on it really, all we can do is we can you can speak to your accountants get that invaluable tax advice that is available to you if you are a Brookson one customer, if you’re not obviously get in touch with Brookson and it might be something they can help with and then you can speak to us on the mortgage as well, it’s a very joined up approach we try and make sure that customers feel that they’re really sort of getting looked after in a way that the SPV or the limited company is managed and also the mortgage needs are also managed too, we do try and deliver that holistic service so whether it be with the accountancy service or whether it would be in the financial services as a whole there’s lots of different services that Brookson Financial can offer in terms of being focused around the limited company customer, that’s what is embedded in us really and we’re looking at financial health checks setting up security through the business and pensions so we’ve got an amazing pension team here that have got a fantastic proposition for Brookson and clients too. We’ve also got the mortgage service as well so it’s not just the accountancy service and the mortgage actually you’ve got all these other areas that you could potentially take Brookson up on and look into. I agree with you mike we really can’t give an opinion on whether the housing market is a good time to invest or not it’s just a case of doing your research making sure that you’re comfortable with the figures and then if it is something you think I want to invest my money in, potentially a buy to let through the limited company it might be tax efficient for me etc. We’re the people to go to.
It’s a very specialist area isn’t it. We’ve had more and more enquiries constantly so we’re always learning as well but there’s more and more lenders that are available to help with limited company buy to lets as well as the normal standard buy to lets as well.
Can I get a mortgage now that the furlough scheme has been extended until the end of October?
Difficult question again really, it’s a bit of a grey area with most lenders at the moment are just a case-by-case basis so what they’re doing is they’re not really giving an affirmative answer on how much they can lend, they are basically saying submit the case we’ll assess it and we’ll let you know. Mow one thing that we always pride ourselves on is checking affordability first, making sure that the case is going to be comfortable with the client comfortable with the lender and that’s what we would always do we would use our expertise and our previous knowledge and give you a bit of an idea and a bit of an understanding, whilst we can never give you a 100% answer because ultimately it’s not us lending the money it’s, always the lenders we can give you a bit of background and a bit of information on how they assess it with that individual lender. They definitely are being more cautious like I said before so it’s not unusual that they’re asking for more information that they sometimes would previously, so it might be delving a little bit further into the history of contracting or looking at the limited company in a little bit more detail if we’re going
down the accountancy route but at the end of the day if you if you use somebody like us this is what we specialise in, we specialise in contractor mortgages we specialise in self-employed mortgages so you’re not really going to be able to get any other broker firm that are going to know your business more than we do and we understand the contractor mortgage market and we understand your business model as well because we have access to connect portals we have access to the accountancy services so we can really build a picture and build a portfolio of how your limited company looks and what your history is and what the future holds for you as well and so really like I said it is a little bit difficult to give you a definite answer because everybody is different but again it’s just a case get in touch with us, we can run you through those options, you can have a free initial call with a mortgage advisor, it can take anywhere from 30 minutes to an hour, the time is yours the time is golden so you want to make sure that you’re getting that proper advice and then building the foundations from that advice as well. I don’t know if you want to add anything to that Mike.
It’s very important to get the advice, I mean you really don’t have to take our advice but that’s what we’re here to do, we have the experience in this field so we’ve been doing all of this for 20 years, for the last four years been doing contractors I didn’t do contractors before and my eyes were opened as soon as came in to how we can help contractors, it is important to talk to a specialist like ourselves.
Just on the furlough Billie I think there as well lenders are asking more and more questions aren’t they and they’re becoming part of the application process that even we have to ask to answer questions about has Covid 19 affected your business has Covid 19 affected your income, reduced hours, furlough etc so you know we are there to help and it’s individual circumstances isn’t it.
I think it’s very important just touching on the hours and the day rate, I am seeing um quite a bit of that now, so clients are asking you to take a 10% or a 20% pay cut in your hourly rate or the daily rate, please don’t worry we can still use that day rate as it is and it’s not a problem the fact that you were previously on a slightly higher income and now on a lower income at the end of the day it’s still in income so we can still utilise that we can still build the affordability on that as well and it’s also really important that you don’t think you automatically can’t get a mortgage anymore, actually the likelihood is that we probably can but what options are going to be available to you is what we really need to discuss, it all it all centres around affordability, we wouldn’t let you pay for a mortgage if we didn’t think we you could afford it and obviously the lenders wouldn’t either so um so have a chat with us have a chat with us.
If you’re looking for advice about mortgages, get in contact with Brookson Financial and speak to one of our expert advisors.