What should you do?
Lots of people are feeling the impact of the current uncertainty, worries can settle in especially about the roof over your head if your income and cashflow situation is changing. But this crisis is very different from the credit crunch in 2008 in that the banks are highly capitalised and are now in a position to help, rather than punish.
If you have any concerns about your ability to maintain your mortgage payments in the short term then your first call should be to your mortgage lender.
They are all in a position to offer a 3 month payment holiday for those affected by recent events. This can ease cashflow and allow valuable funds to remain in your business.
Any payment holiday granted is a relief from your monthly payments in the short term but it is important to remember that this ‘missed’ interest will be added onto the mortgage and will incur interest in the long term.
What else can you do?
If you have been putting off reviewing your mortgage, perhaps it is a good time to ensure that you are on the most appropriate terms, are you on the best rate available with your current lender? We can provide you with advice on this so you are not paying too much.
You may want to consider reviewing your outgoings, consolidating debt onto your mortgage is a good way of reducing your monthly outgoings in the short term but it is important to consider that you may pay more interest by securing unsecured debt onto your mortgage over a longer-term.
It is important to note that lenders underwrite on taxable income for the last 2 years rather than on what your immediate cashflow is right now.
Are your Buy to Lets on the best possible rate? Buy to Let interest rates have come down in price and interest savings can really boost rental profits. Realising equity into an offset savings account to provide a buffer could also be considered.
In the midst of these unchartered waters lenders are unable to process applications in the volumes that they were before and are making efforts to curtail application numbers. Technology is playing a part and they are looking at automated or desktop valuations. These cannot be used in all cases but can be handy, but it goes without saying that whilst we are in our lockdown the processing of mortgage applications are being heavily affected.
Lenders have been competing for our business for some time, competition has driven prices down and there is a strong appetite to lend. The banks have been locked in a price war, are well capitalised and are in a position to help. Interest rates are at their lowest ever at 0.1% and whilst it is existing customers on tracker mortgages who benefit most from this, interest rates on new mortgages remain very cheap.
Review your mortgage...
If you need any advice before speaking to your lender about a payment holiday, or you want to review your mortgage options in any way please do not hesitate to get in touch.