The coronavirus pandemic and the subsequent lockdown of the UK has affected all areas of the economy, with businesses being forced to close or significantly reduce their output because of social distancing guidelines. The housing market is one such area that has been impacted – with restrictions such as limited viewings in person, there has been a halt on people buying and selling homes however this shouldn’t necessarily affect your remortgage if you are staying put. If you are simply looking to switch your loan then this should be a lot easier to navigate.
Can I still apply for a remortgage?
Classed as an essential service, banks and building societies are still very much open for business, albeit with reduced hours and services and new guidelines on social distancing.
If you are wanting to remortgage, then this is certainly possible. Whilst some lenders have taken a step back and withdrawn certain products, there are still hundreds of deals available so if you are coming to the end of your current mortgage deal, then there should be plenty of options for you to consider.
Although the number of products may have reduced over the last three months, rates are particularly competitive right now, helped along by the Bank of England reducing the base rate to just 0.1%.
Is the remortgaging process any different?
When remortgaging, a lender will typically require a valuation of your home (more so if switching your mortgage to a different lender), which requires a surveyor to carry out a physical inspection of your property, something that hasn’t been possible to do during lockdown.
Some lenders have adjusted their processes, using alternative methods to estimate the value of homes. Automated Valuation Models take different data sets, such as local house prices, to calculate a property’s worth. There may be some restrictions on this method, such as properties of non-standard construction etc, but in most cases should give an accurate valuation estimate.
How will furlough affect your remortgage?
There are millions of workers across the UK who have been furloughed due to Covid-19 and if your current deal is coming to an end you may be wondering whether your employment situation will affect your remortgage chances?
It’s good to know that many lenders are taking a pragmatic and sympathetic approach to the issue.
If you are currently on furlough this doesn’t necessarily mean that you will have your remortgage application turned down. The lender may well take your full income into account, but this may depend on a number of factors such as how long you have been on furlough or whether your employer is topping up your payments. It’s important to understand that everyone’s situation is different, and the lender’s decision will be based on your individual circumstances.
Will my remortgage take longer than usual?
Whilst banks and mortgage lenders are effectively open for your business, it’s worth remembering just how busy they will be. With demand from customers for mortgage payment holidays or other financial concerns and staff shortages due to illness or self-isolation, processes are bound to take longer than usual.
If your current mortgage deal is coming to an end, in most cases you could save money by switching to a new deal rather than moving onto your lender’s Standard Variable Rate.
If you are currently on a fixed rate, you can typically start the remortgage process 2-3 months before your deal comes to an end without any early redemption penalties – it’s certainly wise to start to process sooner rather than later to allow for any delays.
If you are looking to speak to one of our mortgage experts to find the right remortgage deal for your circumstances.
The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.