What I've learned processing first-time buyer mortgages through the Pandemic | Mortgage advice

Mortgage advice for first time buyers during the Pandemic

Throughout the COVID Pandemic, I have been working with first-time buyers to help provide them with the best advice, so that they are able to purchase their “dream first home”. Whilst working from home, and in an ever-changing market, I have found a new way of working. As with the rest of the world,  I have had to adapt quickly to give, as ever, the best possible advice and outcome for my new clients given the fact that Mortgage lenders are changing lending criteria and their products on a weekly/sometimes daily basis, whilst they anticipate what is likely to happen to the economy after this COVID Pandemic. I wanted to share how the market has shifted during this Pandemic and how you as a first-time buyer can be best prepared. This is only advice I can offer on my experience up to date. Everyone's situation and circumstances are different, but I will always be transparent in my advice.

1.

Before the Pandemic hit, a lot of first-time buyers were able to get away with as little as just a 5% deposit. Now, that can be hard to obtain. This is due to the pressure on banks at present. There is still the option of 90% mortgages with some lenders but these are on a limited time offer only. They simply can't afford to have these offers available in the long term. It is worth maybe factoring this in your decision to buy your first home. With lockdown, people are currently able to save a bit more. If saving more of a deposit isn't an option, consider purchasing a cheaper property. It could be worth not pinning your hopes on a property at the higher end of your budget.

A mortgage broker can be a godsend in this part of the process. They can move quickly and in line with the rapid market changes.

2.

Be prepared in advance with a decision in principle. Especially if you find your property and want to move fast. Again, a broker can help to get you the best DIP to use as evidence that you are a serious buyer. A lot of people aren't really aware of a decision in principle until they connect with an estate agent and want to start viewing properties. An estate agent will always recommend their own mortgage broker, however, It is always worth getting a second opinion especially from an experienced broker. A client of mine was actually to able afford a £160,000 Mortgage, but they had been told previously they could only get a Mortgage for £100,000 which limited their options hugely. It's always worth questioning.

3.

A lot of us would have found ourselves furloughed during the Pandemic. Being furloughed means you would have only been paid 80% of your salary. Once you have been released from furlough, lenders will need confirmation going forwards that you have returned to your full pre-COVID salary to ensure your job is secure and income is sustainable. You will need a letter from the company stating your full salary going forwards and this needs to be dated.

4.

Patience is key. Particularly through a Pandemic. The usual turnaround for an approved mortgage from a lender is around 3 weeks. This is now much longer in my experience. As the saying goes, no news is good news. Have faith in yourself and of course your Broker. We're all in this together!

5.

Finally, organise your admin. Look over your payslips, check the exact take-home amount and factor in regular bonuses. Check your credit report on numerous sites such as Experian and Equifax. Also, gather your bank statements and payslips for at least the last 6 months. Most lenders will only want about 3 months' worth, but by the time it gets to that stage you may need the most current ones since you started collating them. It just saves any stress gathering this information quickly.

I hope this helps, and continue to stay safe out there!