Only one word can express the start of this newsletter – Chaos! At the time of writing, many lenders have stopped lending completely and most others have increased their rates substantially. The pound has devalued, and the markets are reacting to the budget.
However, whilst this has reduced options, and there may be challenging times ahead, the mortgage market is most definitely not shut. Some are comparing this to the crash of 07/08, but it is no comparison. The current mortgage market has plenty of funding and once the current volatility is over, there will be plenty of mortgage options available, albeit at slightly higher rates than previously.
The difficult bit is time. Firstly, as the cost of funding has risen substantially over the last few weeks lenders have had to withdraw products with little or no notice.
In the main, mortgage brokers tend to get 24 or 48 hours’ notice. But more recently this has been less than a couple of hours in some instances. One lender withdrew rates on a Friday and informed the broker market on the Saturday. We recognise this change has to occur to save the financial status of the lender, but it’s frustrating for the end consumer.
Secondly, a mortgage offer may be issued. But if you need to change property, or change the loan size, the lender may only use the current products available to issue the new mortgage.
Finally, most lenders are some two to three weeks behind (some eight weeks!). Some surveyors the same. So, if you are in a rush, you’ll need to check the lenders’ current service standards before applying to them and ensure you provide everything required at the outset. You don’t want a lender looking at your case after three weeks, to then reach out to you and request further information, that, once provided, is then back in the queue for three weeks. More, now than ever, it’s time to seek professional help. A good mortgage broker will have close relationships with their lender partners and have a good knowledge of what’s happening in the marketplace.
If you are looking to review your current mortgage options, some lenders allow you to book rates up to six months in advance. So, get in touch with Impact and start having those conversations. Time now really does cost money.
If you would like advice about your mortgage, please give Impact Specialist Finance a call on 01403 272625 or book a mortgage consultation with an adviser. Alternatively, you can make a remortgage, buy-to-let or new mortgage enquiry by completing the online form.