More and more people are looking to realise their dream of home ownership. However, being on furlough can affect how confident they are of getting a mortgage. As the top provider of independent mortgage advice Bristol has, we would love to offer support. It is still possible to get a mortgage while you are furloughed, but you may need to do a little more work to find a buyer and show that the risk of you defaulting is low.
The impact of furlough
The furlough scheme has been vital for employers and employees over the last year. Every worker on it got a guarantee that they would receive at least 80% of their salary even if they couldn’t work any hours because of covid. The Government provided the funding to employers to avoid a huge wave of redundancies.
The scheme was originally only meant to last until the end of June 2020. However, there have been five extensions and the current end date is the end of September 2021. With lockdown easing and more businesses reopening, more and more people will be able to get back to work. However, some may still not be able to or may only have partial hours. The furlough will continue to help them.
What does it mean for mortgages?
The best news is that people can still get mortgages, whether they have been on furlough or not. Lenders are continuing to look at applications and offer them when people meet the affordability checks.
There are a number of key factors that lenders will look at when they offer mortgages, especially to people on furlough. This includes your age, the amount you need to borrow, how much you have for a deposit, the type of property, your credit history, and debts. They will also check the predictability of your income. The latter is very important. If the lender feels there is a high risk of a job loss or a reduction in your income where you won’t be able to afford the mortgage, they may not lend to you.
Some lenders may ask for extra documents to prove your employment status. For example they may want a letter from an employer to confirm your job is not at risk. Some will want to see your employment contract.
Offering independent mortgage advice in Bristol
Your Space Mortgages is the perfect people to speak to if you have questions about mortgage availability, furlough income, and more. Our goal is to help each client to find the right deal. We can do this by looking at the whole market rather than just high street lenders. This can also help people who may struggle to find deals with this small number of lenders.
So, if you need any help, come to us for the best independent mortgage advice Bristol can offer. We can give you a really great service.