There has never been a more important time for customers to seek the advice of a Free mortgage advisor in Brighton as we start to see lenders reducing their exposure to the riskier end of the market. Those operating in the 90-95% LTV arena, Lenders offering first time landlord products and for some who operate predominantly in the self-employed market, there will be a period of re-positioning and re-pricing but of course this is where a mortgage brokers value really shines through. There are still plenty of attractive deals available and feedback from lenders who are well capitalised is that they are very open to business but can’t give advice in their branches in the current climate.
We are hearing and seeing a focus on payment holidays through email social media. What is clear, is that not all lenders have worked out how they will offer this option to customers who are in financial difficulty as a result of the Covid-19, and in what shape it will be delivered. A few are looking at moving customers to an interest-only option for a short period of time, others are looking at extending the mortgage term by 3 months, whilst the rest rely on their current terms and conditions. The challenge, breaking the relationship between a payment holiday and the system impact on your credit report. Of course a payment holiday is not free and has long term cost implications for a borrower, so the decision to take the holiday should not be taken without sound and professional advice.
One question we have been asked is “is the Insurance Industry going to follow the Lending world by introducing a three month holiday for protection premiums” and for the majority of insurers this is a no. Some are looking at the option, but this involves significant systems development and with the Prime Minister suggesting that we may have reached the peak of cases in twelve weeks, it may be that such changes are not necessary. In fact, Insurers, whilst not publicly announcing moves, are warning that anyone looking to cancel a policy and then to re-instate it once we are over the worst, they run the risk of having inferior cover put in place. This means for the sake of 3 months premiums; the policyholder could be putting the future financial security of them and their family at risk if we should ever suffer a repeat to today’s events. Anyone looking to cancel their insurance should be encouraged to think twice and perhaps prioritise the cover they have now, they might never get it again in the future.
Finally, it is worth re-iterating the Government’s message, that this situation is not like the credit crunch of 2010 where banks had little capital to lend, this is about saving the lives of the elderly and vulnerable and helping others.
https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate
Base rate
Free mortgage advisor in Brighton, go to Brighton Mortgage Broker – The Finance House