Close

Please enter your Log-in details below:



Subscribe

Under the skin of the letting market

Here we share news and views on both the local letting market in & around Oxfordshire and all planned and recent legislation.


Are new mortgage rules making it harder to borrow?


Nick Walker FOCUS Mortgages

 

The mortgage market today offers some of the keenest rates that we’ve ever seen. Two-year tracker rates at just over 1%, five-year fixed rates at 2.5% and generous levels of mortgages offered by many lenders are just the start. The problem is, however, that tracking down and securing the most appropriate and competitive mortgage can literally be a nightmare because published rates and fees on the internet only tell a tiny part of the story.

There are so many underwriting factors that will ultimately impact on whether or not a mortgage is granted and it is therefore vital that proper independent mortgage advice is sought before any  application process starts with lenders. Many people failing to do this simply end up tripping up at the first hurdle and can, inadvertently, scar their credit file and further complicate any application procedure going forward. Often, those rejected just accept the fact and do nothing more.

For those looking to invest in property, now is an excellent time to borrow

For those looking to invest in property, now is an excellent time to borrow

Many others will not have applied for a mortgage within the past 5 years and, because the world of mortgages is completely different to what was available during the Noughties, it can be a dangerous place in which to venture without proper independent advice.

Banks and Building Societies do want to lend money and it is a fallacy to suggest that they are making it more difficult to qualify for a mortgage in this new era. It is simply wrong to think that once you enter your forties that you will no longer qualify for a mortgage. What lenders are doing, however, is that they are being far more selective in what type of customer they are ultimately looking to assist. Because lenders can’t specifically discriminate against certain borrower types, they each set much of their criteria in such a way so as to initially sift the business.

Just as in many other industries, companies choose to specialise in niche areas that suit their investment/risk profile and therefore set their stalls out accordingly. For the average borrower, however, finding and understanding what each lender is offering, or even if they’ll be welcomed at the stall, is particularly hard.

Using an independent, qualified, professional mortgage adviser in the process of mortgaging a residential or buy-to-let purchase, or remortgaging an existing property, is therefore vital in order to save valuable time and money. The future of mortgage lending appears very bright – it’s just that it’s now very different.

For those looking to invest in additional property, now is an excellent time to borrow to assist in the process. With fixed interest rates looking to remain low for the foreseeable future, borrowing costs are set to be well below anticipated rental yields and landlords can therefore enlarge their property portfolios without necessarily dipping into valuable cash reserves.”