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THE SHARED OWNERSHIP MORTGAGE MARKET IS IT NORMAL? JON LORD, MD AT AWARD-WINNING SHARED OWNERSHIP MORTGAGE BROKER METRO FINANCE, EXPLAINS WHAT THE CURRENT MORTGAGE MARKET IS LIKE FOR FIRST TIME BUYERS
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very month at Metro around 2,400 eager buyers contact us for help with shared ownership mortgages or simply to check what’s affordable. Common questions right now are, “Is the mortgage market normal?” and “Can I still get a mortgage?” The short answer is yes and yes... When you work with mortgage lenders for long enough, you tend to adapt a mindset the same as one – not in the sense of shouting “decline” when asked if you’d like a drink... but rather understanding and feeling what it is that works for them, at any given time, dependent on the economic climate. Which in turns, helps avoid the word “decline”. So, what has changed over the last year, and is it really harder to get a mortgage? Firstly, and probably most under the spotlight, is the issue of jobs and furlough – we need to understand that lenders are concerned about long term employment. So, while it might appear some lenders accept furlough income, the reality is you will
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need to be back in work at the point you require mortgage completion. Still on employment, lots of people rely on bonus pay or overtime to obtain the mortgage amount required. In plenty of instances neither of these have been paid for the past three months, hence can’t be used by the lender. In essence, some people might need to wait until that overtime or bonus builds again, now that lockdown is gradually ending. If you think about lenders as working from “real visible data”, they need to see and rely on that extra income over the last few months. Have interest rates risen? Not in the usual sense, Bank of England rate hasn’t changed. But mortgage fixed rates fluctuate all the time, in line with lender appetite in the moment. What
