Covid-19 & How It’s Affecting the UK Mortgage Market

The Coronavirus is having a huge impact on everyone and every walk of life right now and the UK’s mortgage market is no different. In the face of an almost total lockdown of business activity, the UK government has had to take a number of steps to help people stay financially afloat. Along with furloughing PAYE wages across the board, mortgage lenders have also been compelled to make things easier for their customers.

Payment Holidays

One way in which mortgage companies are taking some of the strain off of their customers is by providing an optional payment holiday. This means that for up to 3 months, those with mortgages are able to approach their lender and ask for payments to be deferred. According to the BBC, around 1 in 9 mortgage holders has so far taken this offer up.

A payment holiday is something that does need to be applied for, as it doesn’t happen automatically and anyone thinking of taking advantage of it needs to consider the ramifications of doing so. It can increase the amount of your mortgage and increase the cost of borrowing, so it’s a good idea to ask your lender precisely what the knock-on effects are.

Lenders Have Reduced Borrowing Levels

Since the Coronavirus pandemic really took hold, the UK’s housing market has effectively stopped and this has had a huge impact on the amount of mortgage products being offered. A lot of lenders have already withdrawn most of their mortgages because of lack of staff and because the lockdown basically means people aren’t allowed to move.

That’s not to say no mortgages aren’t being offered at all, but some major banks are simply not currently processing mortgages with a loan to value higher than 60%. More can be found on this by following this link to the Guardian.

Very Low Borrowing Rates

Back in mid march 2020, the Bank of England cut the UK interest rate to their lowest rate ever of 0.1%, as can be seen in this BBC story. The knock-on effect of this is that the rates available are the lowest they’ve ever been. Even if you’re not able to move right now, it’s still possible to secure yourself a deal that allows you take advantage of these historically low levels.

The move may well have been one that was made to help UK businesses and the economy in general, but it’s something that is certainly good news for mortgage seekers…though it is bad news for your savings.

Uncertain Times

There’s no doubt that we’re living in uncertain times, but things have a habit of getting better with time and whilst the UK housing market is largely dormant, things will eventually get back to normal. The fact is that it’s an issue that’s being felt in every part of the economy and not merely restricted to the mortgage market.

It is very different in the housing market right now, but it has presented an opportunity to get an amazing fixed rate mortgage deal – the likes of which we may never see again. For many of us though, it’s just about getting through the current situation and while we don’t know precisely when lockdown will end, it will end. It’s just a matter of time.

At Red Star Financial Services, we are a FCA-regulated whole-market mortgage broker and we’re here to help you find the best and most suitable financial products for your needs. Our extensive network of insurers and lenders means that we’ll always be able to find products that suit you perfectly.

If you’d like to know more about anything discussed here, we recommend that you take a look around our website www.redstarfs.com where you’ll find lots of information about mortgages, insurance and a whole lot more. Alternatively, if you’d like to speak to us about any financial planning matter, give us a call on 0161 823 1733 and we’ll do our very best to help.

The Benefits of Using a Mortgage Broker

When it comes to remortgaging or getting a mortgage for the first time, there are several paths you can take to find the best deal. You could, of course, go and apply directly to a high street bank or even search online for a good deal yourself. Whilst, these options can result in you finding a good mortgage, they can be painstaking and you might not even end up with a competitive mortgage to show for all your efforts.

One path that many mortgage-seekers choose is to go via a mortgage broker. They choose this route because it comes with a number of advantages and it takes much of the guesswork out of the situation. Here we look at the various reasons why a mortgage broker is often the best and most savvy option.

Benefit #1 – You Get Access to Hundreds of Products

When you employ a mortgage broker, you quite literally open yourself up to a much larger selection of products. Sure, you may find lots of deals online, but a mortgage broker will usually have access to a much bigger selection of products – some of which you simply won’t find on the internet. With contacts at major mortgage providers, mortgage brokers can also find specialist deals for people who might otherwise find it difficult to get approved e.g. self-employed people and those with poor credit.

Benefit #2 – You Get a Personalised Deal

Mortgage brokers are on your side, so they represent your interests, rather than those of the mortgage company. With their expert knowledge and industry insight, they’ll be able to find the deal that most perfectly suits your particular set of needs. Sometimes, it’s not as simple as a 25 year 80% loan to value mortgage and this is when the problem solving abilities of your mortgage broker come in very handy.

Benefit #3 – You’ll Save a Lot of Time

If you’re scouring the market yourself without any professional assistance, you’re probably going to be spending a good deal of time just making applications. When you work with a mortgage broker, you’ll only ever need to make a single application and they’ll be able to make instant comparisons to other available products, so you won’t have to.

Benefit #4 – You’ll Avoid Unpleasant Hidden Costs

A good mortgage broker will have a firm understanding of the mortgages they sell, meaning they’ll know if any unpleasant clauses are lurking in the small print. As thorough as you may be when searching by yourself, it’s very easy to miss something when you don’t have the industry knowledge and familiarity with the subject that a mortgage broker has. What’s more, small mistakes like this can cost you a lot of money in the long run, so you’re safer going with someone who’s got lots of experience.

Benefit #5 – It Doesn’t Usually Cost Anything

A reputable mortgage broker will be fully transparent about how they make their money and it’s very often via commission paid to them by the mortgage company that they recommend to you. This means that you’ll not be charged anything for this highly-personalised service – in fact, by finding you the best deal, they’ll actually help you save money!

Expert Guidance When You Most Need It

Taking out a mortgage is a decision that will impact you either positively or negatively for a number of years, so making the right choices at the outset is very important. A mortgage broker is someone that will ensure that you not only get the best deal, but that you’re aware of everything you’re signing up to. Think of your mortgage broker as someone in your corner, looking after your interests.

If you’re in the market for a mortgage and you’d like some expert guidance, we’d love to hear from you. At Red Star Financial Services, we have the knowledge and experience you need to ensure that you make the best possible decisions for your financial future. You can find out more about us by visiting us online at www.redstarfs.com.

If you require assistance relating to anything discussed here or you’d just like to chat with one of our financial experts, give us a call on 0161 823 1733. Our team is ready and waiting to help you in any way they’re able to.

The 3 Biggest Benefits Of Remortgaging

Choosing a mortgage the first time around was difficult enough. The very thought of enduring the process all over again isn’t an attractive option for anyone. However, remortgaging offers a huge number of benefits – the main one being more money!

Here, we explain why you might want to remortgage…

1. Better interest rates

When your current mortgage deal comes to its end, you’ll be placed on your lender’s standard variable rate (SVR). Typically, this will be above your original interest rate, and higher than other deals out there too. But, with remortgaging, you can discover a less costly rate, particularly if payments have brought down your balance.

You can even look to remortgage if your current deal isn’t up yet. Whilst you may have to pay a low-priced exit fee, on top of a potential early repayment charge, there’s still the chance to cut costs overall – especially if you have a substantial mortgage debt.

2. More money

Times may have changed since you first took out your mortgage, and your property’s value could have increased. If this is the case, you might find yourself in a lower loan-to-value band, meaning you’re eligible for reduced rates.

You could also increase the value of your home via remortgaging. If you choose a deal that allows you to top up your cash pot, you’ll have the finances available to make some home improvements to boost kerb appeal. Whilst a lender will probably ask you why you want the money, for renovation work, it’s likely they’ll approve.

3. Flexibility to your circumstances

Your mortgage might not suit your present situation. For instance, it could have limitations on you financially – and not just because of high interest rates. Perhaps you want to make overpayments, but the deal prohibits you from doing so.

Alternatively, your mortgage may be dependent on the Bank of England’s base rate – and if this rises, so does the amount you’re paying. This worries plenty, so it’s understandable if you want to swap to one that’s more adaptable to your circumstances.

You may also want to switch from an interest-only deal to a repayment mortgage. Whilst your current lender should be able to make this change for you, it might not be the best value for money. Therefore, remortgaging can be beneficial in this situation.

Remortgaging really can be the way forward. However, finding a lender can still be a laborious task. But it doesn’t have to be. In fact, it can be super easy.

At Red Star, we’ll find you the best deal available for your specific situation, and quickly. We’re able to show you lenders who you won’t find on comparison sites, as well as provide tailored support and guidance at your convenience. You really can put your trust in us – we offer FCA-regulated advice, along with swift online comparison.

Want to benefit from remortgaging? Simply get in touch with our incredibly personable team today. We truly do make it hassle-free.