If you ask someone about the housing and mortgage markets in the UK, you are bound to get a varied set of answers. The government recently gave an SDLT holiday to encourage homeowners to be in the market and buy homes in order to save the housing market from crashing. The mortgage market, on the other hand, has been going through some ups and downs.
More Mortgage Applications and Rejections, Alongside Increased Interests
This is the very headline you will see across financial journals and dailies – the mortgage applications have considerably gone up on a monthly and yearly basis. However, the rate of mortgage application rejections and offered interest rates have gone up in the same period. So, with the help of the best mortgage advisors, can you optimize for this situation? The answer is a resounding ‘yes’ if you understand the situation clearly.
First and foremost, the lenders have started mitigating some risks for the obvious reason – people have taken interest payment holidays, delinquencies and default have relatively increased in some market segments, and people are facing challenges in keeping up with their income. So, given the conservative outlook that a lender should ideally follow, most lenders are focusing on lending only to the safer applications.
Hence, if you fall into one of these categories, you may face some challenges in getting your mortgage application approved in these times:
- You are a first-time homeowner and are applying for a high loan-to-value ratio.
- You have recently taken an interest holiday.
- You have had some challenges in the past in repaying your mortgage and hence have a relatively lower credit score.
Most mortgage brokers may find it challenging to help you get a mortgage if you fall into any of the three categories. Here is the thing – borrowers in these categories had to go through some hurdles in getting the mortgage, even before the pandemic had settled into the mortgage market. So, as far as you have one of the best mortgage broker helping you out, you may still get a good mortgage deal.
Solution: Focus on What You Can Control, with the Help of the Best Mortgage Brokers.
While it is easy to get overwhelmed while thinking about the ongoing interest rate revisions, if you already have a mortgage, you are in a relatively better situation if you are planning to buy a home. While you may not get direct advantage of the SDLT holiday, you can still get a mortgage.
Here is what you have to work on:
- Get the best mortgage advisor who can help you navigate the market, understand the dynamics, aggregate the best deals, and provide you with advice on how to choose the deals that can work the best for you.
- You may have to go for a different mortgage deal than what you had expected. For instance, you may get a mortgage deal with a variable interest rate instead of the fixed one. As far as you understand the terms, you can take the deal, take advantage of the SDLT holiday if it’s applicable to you, and refinance as soon as the market becomes friendlier.
- Focus on better financial planning by making your income more consistent, control your expenses, and defer any major expenditures to focus on getting a new home.
If you have the best mortgage broker or advisor, like Zinga Mortgages, helping you out with your mortgage application process, you can still finish your home-buying process in this economic environment. Focus on the property you want to buy, get in touch with the Zinga team, and watch as your mortgage process is managed by professionals who can aggregate some of the best mortgage offers, advise you on choosing the right one, and expedite your closing process.