Is now the right time to buy a property and are you able to apply for a mortgage in the first place?

You may have planned to apply for a mortgage before lockdown occurred. You might have been saving for months or years for a decent deposit. So where do you stand now? Can you still apply for a mortgage or do you have to wait until restrictions have been lifted?

While some lenders have temporarily stopped accepting any new loan applications, others are happy to receive new ones. Although the COVID-19 virus has caused uncertainty, unlike the recession of 2008, there is no issue with lenders having cash to lend.

However, there is some variation regarding how lenders are responding to the current situation. Some have withdrawn some of their mortgage products. Others have introduced a maximum loan to value of 60 per cent.

If you have recently been furloughed from work and are on the government’s Job Retention Scheme, you can still apply for a mortgage or a remortgage. However, lenders will typically only take 80 per cent of your income into account. This is unless your employer has chosen to top up your income to 100 per cent of your salary.

Getting a mortgage when self-employed

If you are self-employed, you can still apply for a mortgage (self-employed mortgages). Lenders may ask for the last three months’ worth of business bank statements. Some will accept applications from self-employed clients eligible for the government’s Support Scheme. Again, only 80 per cent of your normal income will be considered.

Is now a good time to buy a property? As things are now moving very slowly and most transactions are not being completed, some estate agents believe it’s a buyer’s market. Interest rates are expected to remain low. The Bank of England recently voting to keep the rate at a historic low of 0.1 per cent.

Now could be a good time to make an offer. House prices may drop in the coming months due to lockdown, but agents predict they should recover well. Advice from some agents is to keep browsing. Even if you don’t intend to put an offer on a property right now, know what’s available.

Organise your paperwork for your mortgage application

It’s a good idea to get all of your paperwork in order for a mortgage application. You’ll need three months’ worth of bank statements, pay slips and proof address from a utility bill. Have paperwork for credit card or loan statements handy and proof of savings for a deposit. Getting prepared will stand you in good stead. ‘It is always worth looking on Rightmove and other portal sites for properties,’ says Lisa Fowler, Director of London-based Henley Homes Agents. ‘Since lockdown there has been a huge decrease in new properties going on the market, but things are changing slowly. There is a little bit more activity. Call agents and tell them your requirements. They might have your dream property waiting to come onto the market after lockdown.’

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