What does Coronavirus (Covid-19) mean for your mortgage application?

The housing market in England is open. You can buy, or sell, property during the lockdown (5th Nov-2nd Dec). But what does covid-19 mean for your mortgage application?

Estate agents are open so you can view a property in person, and your agent will provide you will guidance on the PPE you will need to use.

How is the Government supporting the housing market?

The housing market in England experienced a slight lift between the end of the first lockdown and the start of the second, largely due to the Government’s temporary cut in Stamp Duty, and other measures that are in place to support the market, and limit the effects of covid-19 on the economy.

The temporary cut means the threshold for which buyers will pay Stamp Duty has increased from £125,000 to £500,000 and this holiday will be in place until 31st March 2021.

Mortgage providers announced support in the form of a ‘Mortgage Holiday’ where you could suspend payments for up to three months (six months under certain circumstances). If you’re struggling to pay your bills Money Saving Expert have a guide of the help available. 

How to apply for a mortgage during the pandemic

You should be able to view properties in person during the lockdown and speak to a mortgage adviser face to face with appropriate PPE. 

Mortgage applications are accepted but the criteria are strict, with some lenders offering a lower multiple of your salary at the moment, or requiring a higher deposit. 

A great way to plan in advance and get a rough idea of the figure you can expect to borrow is by using an online mortgage calculator.

If covid-19 has impacted your ability to be accepted for a traditional mortgage the government have several schemes in place to help buyers, especially first time buyers looking to get on the property ladder. 

If you’re planning on buying a home and fit the criteria you might want to look at a Lifetime ISA where you can put in up to £4,000 each year until you’re 50. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.

If you’re planning on buying a home and fit the criteria you might want to look at a Lifetime ISA where you can put in up to £4,000 each year until you’re 50. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.

Help is also available with shared ownership meaning you can get a shared ownership home through a housing association. You buy a share of your home (between 25% and 75%) and pay rent on the rest.

If you’re unable to secure a mortgage with your bank or the top lenders you may find a mortgage broker useful as they are often able to help with more challenging applications and have more flexibility with criteria than the major lenders.

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