Great News for Homebuyers!
Only a 10% deposit required to buy a home. Lenders are now doing "desk top" and "drive by" valuations, with staff back and system changed to deal with new applications.
Lenders have began reopening their doors to British borrowers, making it easier to get a home loan! Fantastic news for homebuyers.
At the start of the lockdown, several businesses shut their doors and several deals and loans were only available to those with large deposits. But this week Nationwide, Halifax, Virgin and Santander have all made it easier for people to qualify for a loan.
It is great to see that lenders are adapting and innovating. Nationwide resumed their loans at 85% loan-to-value on Wednesday while Halifax raised its loan-to-value from 80% to 85%.
Meanwhile, this week Virgin Money began offering purchase mortgages again, as Santander increased its maximum loan size - from £300,000 to £500,000 - and cut fees on its residential mortgages.
The New Restrictions
At the start of the lockdown, lenders were forced to reassess their deals - in the light of the new restrictions.
Nationwide stopped offering deals and were focusing on supporting existing mortgage members and continuing to process ongoing applications. This is great now that lenders have all come together and have managed to change their systems to deal with new applications. .
"Lenders had to work out how they were going to continue trading while their mortgage processing centres were being scaled back and staff were working from home," explained Aaron Strutt, product director at Trinity Financial.
Lenders returning this last week "is great news for the market and for borrowers who will have increased choice going forward,"
"It also means the post-lockdown recovery should be swifter when some semblance of normality returns."
Drive-by Valuations
Lenders have been changing the way they operate to cope with the lockdown and are now much more reliant on their IT systems.
One of the biggest problems under lockdown has been valuations, as properties can't be visited by lenders' staff to be inspected. Lenders are using system-generated valuations to get property purchases and remortgages agreed.
Sorting out the problems and gaining confidence in the use of these valuations has encouraged lenders to reopen temporarily-closed doors which is great news for homebuyers.
"We are still getting calls from people asking if it is possible to get a mortgage," - Nationwide
Borrowers typically need a deposit of at least 10% to qualify and lenders will want to know if people's income has reduced as a result of the coronavirus. But that doesn't mean you will be turned down.
There is a little more caution in the underwriting process, but even if a borrower is furloughed, the lender will often take their full income into account if it can be proven that the employer is topping up the salary.
NHS workers are being prioritised on remortgages to make sure they go through smoothly and lessen any potential stress.
Fixed rates continue to be at all-time lows, while the base rate is almost zero, so there continue to be plenty of good deals on offer.
So if you are still looking to purchase a property, now is the time to take advantage of these deals.
If you need any advice or help with how to purchase a property, or if you would like to know how a purchase can still go ahead during this pandemic (which it can) feel free to get in touch.
We are still putting houses on the market, we are still selling houses. People still want to move.
If you need reassurance then we are here for you, working from home.
Take care,
The Alexanders Team.