A Mortgage Marketplace Update Heading Into Autumn
How have mortgages changed since the start of the year?
In one word, dramatically. Whether that be interest rates tumbling across the boards or the constant lending criteria changes. It’s been a whirlwind of a year that has seen a lot of lenders gradually come back to what would have been pre-pandemic levels of lending. We’re going to look closer at a mortgage marketplace update that fully encapsulates the current market conditions.
Whether that be your big high street banks like your Santander’s, Halifax & Natwest. Or even your more unheard of challenger banks such as Aldermore, Pepper Money & Foundation Home Loans. All banks were hit by the COVID pandemic & subsequent lockdowns. In reality, everyone has been effected in some sort of way. But there was obviously a period in 2020 when banks simply stopped lending amid the hysteria. The return of lending was cautious and it would prove a while until we saw the full return of higher loan to value lending. Lender’s primarily took a cautious approach to this. Let’s look further into a full mortgage marketplace update.
The return of high loan to value lending
When banks and building societies did decide to lend again it was genuinely tough to find anything above 75% loan to value. This means borrowers would have to stump up a big deposit in order to get a mortgage. For first time buyers especially this can be quite a task when saving for your first home. Luckily as time went on lending at higher levels became more readily available. But we were still not able to see the really high loan to value mortgages with deposits as little as 5%. That was until March of 2021 and the chancellor’s announcement really sped up this process.
This saw a chain reaction backed by the government’s guarantees that saw lenders that weren’t even on the scheme to return to the marketplace given the new found certainty. Ever since that time interest rates on this have been getting better and better by the week. We started around the 4% mark with interest rates and at time of speaking we are at mid 2%s. This represents a level that was very common pre-pandemic which is fantastic to see. This means borrowing is readily available for a much wider range of potential clients with all sorts of deposit sizes. Getting a mortgage marketplace update doesn’t stop there though.
Banks and building societies frequently changing products and criteria
Another factor in the whole pandemic lending shift is that lenders looked at clients in very different lights. With furlough, SEISS grants, bounce back loans and everything in between, each person and company had been effected in some way. This led to lenders wanting to inspect clients income and circumstances more than ever before. With questions surrounding all manner of things it led to longer underwriting times and constantly changing criteria as lenders wanted to see different t
Taking this all into account it has been a lengthier and more thorough process for every individual to get the mortgage they desire. Luckily it looks like this is starting to ease as we have returned to some form of normality in 2021. Lenders are constantly updating their criteria like never before to keep in line with the current economic situation in the UK.
How do you keep on top of it all?
The short answer is, you can’t.
Even as advisors we are getting multiple emails a day with new rates and criteria updates from lenders. As a retail client you firstly would not have access to this. It’s our advisors job to keep constantly informed and to have direct access to the specifics that relate to your circumstances. This way we can insure a smooth mortgage process for you with as little stress as posssible. Our senior mortgage advisor Ashley has helped many clients get mortgage offers through the pandemic to help them secure their dream homes. He would be happy to assist you on this journey as well.
Equity Release plans are not right for everyone and it is important that you fully consider your options and receive independent financial advice before making a decision. It is also important that, if you do decide to use an equity release product, you choose one that meets your needs.
Remember that taking an equity release plan is generally a long term option. However, there are flexible plans available that may fit your varying needs and some will allow you to repay in the future without penalties.
Buy to Let Mortgages
Some Buy to Let Mortgages are not regulated by the FCA.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
True Advice Financial Services is a trading style of TA and SE Hollom Ltd. Which is an Appointed Representative of New Leaf Distribution Ltd which is authorised and regulated by the Financial Conduct Authority : Number 460421.
Registered Office : 1st Floor Princess Caroline House, 1 High Street, Southend on Sea, Essex, SS1 1JE.