Post-Covid Mortgage Landscape
With the seismic impact of the coronavirus pandemic felt throughout every industry across the planet, I felt it was important to gain an understanding on what the post-covid landscape will be in the mortgage industry.
If we can be certain of anything it is uncertainty. Mortgage lenders thrive on certainty, predictability and foreseeability.
Mortgage lending is simply all about risk. It is the risk of how you are able to afford the mortgage over the term and the strength of the value of the property. This determines acceptance and the terms of what they can offer. Now if we add uncertainty like - unreliable employment sectors, reduced salaries, and increased costs of living - then all of a sudden the certainty, predictability and foreseeability is decimated. This results in application declines, reduced income multiples and increased interest rates.
How can we turn this uncertainty into certainty?
With regards to unreliable employment sectors, a laser-focused government support package to these industries with the focus on keeping people in employment will add certainty.
Reduced salaries and increased cost of living can be an unavoidable consequence of an economic downturn. The increased mortgage affordability restrictions brought about after the financial crash in 2008 cannot and should not be lifted. However, an independent, whole of the market mortgage advisor like myself has the ability to access every lender in the UK. Not all lenders are created equal, some lenders, for example may take a more lenient view on pension contributions than others and this could make all the difference in reaching the loan amount required.
In my expert opinion, mortgages will not be any less obtainable than before covid, IF THE PROPER ADVICE IS USED. With an award winning expert independent mortgage broker managing your application from the beginning, this could well make all the difference. There has never been a more important time to make sure you have the right advice for your potential mortgage.
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