As the Coronavirus pandemic progresses, many homeowners, investors, movers and first-time buyers have had to put their plans on hold.
While most estate agents are now open again, there remain significant changes to how UK residents can apply for mortgages, view properties, and indeed list their home for sale.
These changes include:
- Some estate agents are closed, or open only for meetings by appointment.
- Limitations on house viewings.
- Suspensions and restrictions around on-site valuations.
- Mortgage products being removed from the market.
All of these factors don't mean that it is impossible to secure a mortgage; lenders are looking at new ways to innovate and digitalise the majority of their processes to ensure your plans can proceed safely.
However, if you can't yet proceed, you can make great use of that time.
Here are Revolution Finance Brokers top tips for obtaining the mortgage lending you need, when in lockdown and post-pandemic:
Keep an eye on your credit score.
Your credit rating is always a crucial factor in whether a lender will extend you an offer, so if your move has been delayed, take that time to review your credit rating.
Check out one of the credit profiling services - the most popular tend to be Equifax, Experian, Crediva and TransUnion.
Each bureau might deliver a slightly different report because cross-checking criteria vary.
Still, you can download and look through all of your credit files, highlight any errors, or identify where your rating is being negatively affected and take action to improve your credit score.
If you need help understanding your credit rating, or how this impacts your access to a mortgage, get in touch with our team.
Improve your credit rating.
When you have access to your credit file, you'll easily be able to see whether there are any mistakes - in this case, you'll need to report the error to the bureau and provide evidence that their information is out of date.
For example, if you have repaid a debt, cancelled a credit card, completed an IVA - these can be reported so that your file is updated.
There are other actions you can take to improve your credit score, such as:
- Clearing any debts you can.
- Closing credit accounts you don't use.
- Consolidating liabilities to reduce the interest and clean up your credit file.
Remember that the goal isn't to have no debt at all; in fact, having no borrowing is not favourable, as it means a potential lender can't verify that you can keep up with repayments.
If you haven't ever had a credit card or any borrowing, one option is to take out a credit card that is specific to improving your credit rating. You can spend a minimal amount, pay it back in full every month, and build up a positive credit history.
Register to vote.
If you aren't on the electoral register, this can make it tricky for lenders to track your financial history and extend you an offer.
Should you not be registered, this is a quick and easy way you can improve your credit file - look up the government's website online and follow the steps to join the electoral roll.
Think about who to apply to.
A common issue we see is where a borrower applies to multiple lenders online, or uses a price comparison site and sends off a mortgage application to every provider that comes top of their search.
This causes a big problem because some lenders will carry out a 'hard' credit search, which leaves a mark on your credit file whether or not they make an offer, and whether or not you accept it.
If you have lots of credit checks showing up in a short space of time in your credit history, this can put off any prospective lenders.
The best strategy is to work with a mortgage broker who will know which lenders are best suited to your mortgage needs and create an application for you with the knowledge of what sort of credit checks will be required.
Get your paperwork in order.
One of the most significant stresses of securing a mortgage is providing all the paperwork and documentation that a lender will need to see to be able to offer you a mortgage.
This is something that can take some time, particularly if you need to download documents or look through filing from previous years to dig out old statements, so is an ideal task to do when you are waiting for regular trading to resume.
Some of the most common documents you'll need include:
- Proof of ID - such as your passport or driving license.
- Proof of address - such as a council tax statement or utility bills from the last three months.
- Proof of earnings - such as your P60, or payslips.
- Self-employed accounts - usually for the last two or three years.
- Bank statements from the last three to six months.
- Proof of your deposit - usually a savings statement, or a letter confirming you have the cash ready.
- Credit reports - available from the credit reporting bureaus as listed above.
- Property information - details about the property you wish to buy including the address, location information, what it is built out of etc.
For more assistance with collating application documents and understanding what sort of information is most likely to support your mortgage application, get in touch with the Revolution Finance team.
Do your research.
If you've found a perfect property and are swept away by it, it's easy to forget that you need to ensure you're getting good value for money. Markets change quickly, and a lot of areas have seen a dip in property valuations owing to the pandemic.
Getting value for money is also essential since a lender will be reluctant to offer a mortgage that may potentially be for a higher value than the property is now worth.
You can research property prices in your chosen area by reviewing listings and similar homes online. Many potential buyers use a site such as Zoopla or Rightmove to do their research.
You can also have a look at the Land Registry online, through Mouseprice to see local valuations and get a good idea about what your property should be worth.
The larger your deposit, the less you'll need to borrow, and the easier it will be to secure a mortgage.
If you, like much of the UK workforce, are working from home and are continuing to earn your regular income, if your expenses are reduced without the need to travel, and with reduced social activities permitted, this offers an excellent opportunity to add to your deposit funds.
Most lenders will require a minimum deposit of around 10-15% on a residential property, and the higher your deposit, the better interest rates you will pay long-term.
If your deposit is the bare minimum, adding to this even slightly will make your application a more viable prospect.
For support with applying for a mortgage without a deposit, call Revolution Brokers for advice about the right lenders for you.
Contact your broker
Revolution Finance is a whole of market mortgage broker, working across the sector to secure attractive mortgage lending for all types of properties, investors and home buyers.
Now is a great time to contact the team - as an independent broker we can get you started with preparing for the application process, without any time pressures to give you as much support as you need to consider your options.
We can also help run credit reports, help you understand how to check the value of your property, and start looking at the most advantageous lending terms as they come onto the market.
Give us a call on 0330 304 3040 or send us a message at firstname.lastname@example.org.
Contact us now to discuss your personal options, Revolution Finance Brokers specialise in commercial and residential finance in Essex, Kent, London and Hertfordshire.