COVID-19: Will the pandemic affect my mortgage?

With headlines reporting that the UK mortgage market is in ‘lockdown’, it’s understandable you may be concerned about your ongoing or existing mortgage application.

Can I still apply for a mortgage?

Lenders such as Nationwide are temporarily reviewing new mortgage deals. If you’re applying for a mortgage with 25% equity or more, you will still be able to make an application with Nationwide. Other lenders have increased the threshold to 35-40%, including Barclays, Halifax and Santander.

Who cannot apply for a mortgage during the coronavirus crisis?

If you’re a first time buyer or an existing homeowner with a deposit of less than 25% (or 35-40% for some lenders), you will not be able to apply for a mortgage at present. The measures are temporary, so prospective home movers should stay up to date with new developments.

If you’re looking to apply for a mortgage you should liaise with a mortgage broker/advisor to determine when you will be able to apply.

Are ongoing or existing mortgage applications affected?

No. If your application is being processed or you already have a mortgage offer, you can continue to progress your property purchase and/or sale with your conveyancer.

Please note, if your financial circumstances change after your mortgage offer has been issued, you must contact your lender and conveyancer to ensure the offer is still valid before your conveyancer can request your mortgage funds.

Why are mortgage lenders putting the temporary measures in place?

Lenders require physical valuations for homes with a LTV (loan-to-value) of over 60% (40% equity or less). Whilst the UK is in lockdown, valuations cannot be carried out.

The coronavirus pandemic has also triggered an unprecedented number of enquiries from ongoing and existing mortgage applications. The temporary measures will allow lenders to maintain a high standard of service as the crisis continues.

For more information and advice on buying and selling during the COVID-19 pandemic, please call 0113 264 4414 or email conveyancing@emsleys.co.uk.