It’s our job to monitor the whole of the mortgage market. It seems that every day a brand new deal is launched to cater for buyers’ different financial circumstances, lifestyles or budget.
The mortgage market is flourishing and I don’t think it is over-stating matters to say that in terms of numbers of lenders, the variety and amount of products available, we are almost back to the pre-credit crunch days.
However, before anyone fears a repeat of 2008, this current boom is tinged with caution. Thanks to a raft of new legislation and lenders heeding the harsh lessons of nine years ago.
This is why we haven’t seen a return to the days of 120% loan-to-value mortgages. Also why self-certification mortgages are nowhere to be seen in the UK. This is as theses are the deals which caused so much trouble back then,
Self-cert loans, which were banned by the Financial Conduct Authority in 2014, were a disaster waiting to happen. This is because some people falsified their incomes in order to borrow the money they needed.
Nowadays, lenders undertake income checks and look at a whole range of indicators. This ensures that we can afford to keep up our repayments should interest rates rise.
This is good news, although it has made things tougher for self-employed people. Self employed people traditionally have struggled to get mortgages because of lenders’ insistence on seeing two or three years’ worth of company accounts and who particularly benefitted from self-cert deals.
Many lenders have now reduced this to one year. However getting a decent mortgage when self-employed is still far from straightforward. It is certainly something I would recommend seeking advice about before attempting.
Others yet to benefit are the UK’s “mortgage prisoners”, who took out deals when lending limits were higher. They are now prevented from switching to a cheaper deal. This is because of new, stricter, affordability criteria – even if they have never defaulted.
It’s a ridiculous situation which needs addressing. But, like self-employed people, there are options available for them. Options such as second charge loans, which have become so popular that we now offer them in-house.
In short, there has not been this much choice for many years. But with so much choice available it can be impossible to know which deal to opt for. This is why taking professional advice will help you make the most of Britain’s once-again booming mortgage market.