14 August 2020

Mortgage delays make the case for a mortgage broker more compelling than ever

One of the knock-on effects of Coronavirus seems to be an increase in the amount of queuing – whether it’s waiting for someone to come out of a shop before we can enter or standing in a socially-distant line once we get to the till. Everything seems to be taking longer, and that’s no less true when it comes to getting a mortgage.

Even a standard refinance with the same lender at the end of a fixed or discounted period, with no extra borrowing, is taking several weeks longer than it did pre-pandemic. The situation is particularly hard for first-time buyers, with some banks reportedly rationing the number of mortgage appointments on offer because there is so much competition for the shrinking number of high loan-to-value deals.

Although the mortgage market is open for business, it was in effect closed for two months and lenders are now having to restrict volumes due to operational capacity issues at a time when the stamp duty holiday and pent-up demand is leading to an increase in applications. Banks have had to significantly adjust the way they work with the closure of call centres, staff working from home, demand for mortgage payment deferrals and bounce back loans. Some lenders have asked their mortgage underwriters to work weekends to deal with the backlog of demand. Furthermore, increased scrutiny of income, longer-term employment concerns and rising mortgage rates mean lenders are not willing to offer the same level of borrowing they might once have considered.

However, there are ways in which borrowers can help themselves. Getting your ducks in a row before making an application – making sure you have the correct paperwork, proof of ID, bank statements etc available – will help speed things along. If you are selling a property as well as buying, get it on the market and consider appointing a good solicitor rather than relying on free legals that may come with your mortgage.

A mortgage broker such as SPF Private Clients, is more helpful than ever because their insight will be a real bonus – they know which lenders are struggling with the volume of applications and will take the longest. They know who to pick the phone up to at a lender if an application is taking longer than it should, which may help ease it through. Most importantly, they keep the borrower informed; there is nothing more frustrating than being on hold on the phone for ages to a lender and then being hung-up on without making any progress. A broker will take away the hassle-factor and ensure a speedier solution.

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