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Lenders rule Out 33% of All Mortgage Applications

This article was initially published back in 2019, and now this information has become outdated. Everything was 100% accurate at the date that this article was published.

Mortgage application statistics provided by Experian

Experian statistics show that lenders rule out 33% of all mortgage applications due to mismatches in criteria.

The statistics highlight the importance of customer care and 5-star service when using a mortgage broker in Birmingham. It’s all about the value of the customer and helping them pass the lender criteria the first time.

What did the stastistics show?

Experian also found out that only 3.5% of people searching for mortgages were eligible for deals on the market. However, just because you had seen these cheap deals online, it cannot guarantee that you will qualify for it.

As our customer, we will offer you full customer service, trying to find you the perfect deal.

Experian had shown that 22% of applicants started using price comparison websites to find the right mortgage.

We recommend that if you happen to fall inside that demographic, remember that price comparison websites exclude matching a lender’s criteria.

On top of that, the application can take weeks to process, not to mention that the lender can dismiss your case. Ideally, please speak to one of our mortgage advisors in Birmingham. They can search thousands of deals and pick the right ones tailored for you, saving you time and money.

What does this reveal?

The analysis also showed that 27% were eligible for a mortgage but only for a reduced amount to meet the lender’s affordability requirements. Again, we find this happens all the time. A lender says you can borrow one amount but find a reason to reduce the mortgage available down the line.

How our mortgage advisors in Birmingham can help

Our customers are our priority, and as a trusted mortgage broker in Birmingham, whether your Self employed or looking to Remortgage, we’ll recommend the best deal tailored to you and ease the pressure throughout the entire purchase. Our brilliant mortgage advisors and outstanding back office team will do the bulk of the work for you.

How Might Covid-19 Affect Your Mortgage Progress in Birmingham?

This article was initially published back in March 2020, the property market has now resumed, and this information has become outdated. Everything was 100% accurate at the date that this article was published.

Malcolm Davidson on BBC News | How Has COVID-19’s Impact on The Mortgage Market

Covid-19 & your mortgage application in Birmingham

We understand the effect this outbreak will have on the economy, and some of you may be wondering how the COVID-19 with affect your mortgage? But we would like to point out that we can still help you. We are devoted to our clients and provide fast & friendly mortgage advice in Birmingham & the surrounding area.

Mortgage advice in Birmingham during the outbreak

  • Our mortgage advice service over the telephone.
  • Progressing your mortgage application.
  • Bank of England rate reduction and what this means for you.
  • Concerns about not being able to pay for your existing mortgage.
  • Mortgage industry reactions to the coronavirus.

Our mortgage advice service over the telephone

There’s been no change to mortgage advice service, although, we’re finding that more and more customers want to transact over the phone. We still offer a free, no-obligation mortgage consultation, and it’s the same service seven days a week.  Either way, our advisors are available to answer all your mortgage related questions.

Processing your mortgage application in Birmingham

Business as usual, here we will help you throughout processing your mortgage application.

Bank of England rate reduction and what this means for you

Following the recent rate reduction, most lenders have decided to lower their standard variable rates. For new applicants, it’s our job to ensure that we search for the best mortgage deal for you.

Some fixed rates on offer have actually gone up despite the rate cut!

Concerns about an existing mortgage

If you have been affected by the coronavirus economic wave and are concerned about meeting your mortgage payment, then please call your lender right away. Often, they are very understanding and will agree on a mortgage payment holiday period to help. 

Mortgage industry in Birmingham reaction to Coronavirus

Interest rates are historically very low, and lenders show no sign of significantly increasing these. For first time buyers in Birmingham, home movers and homeowners looking to remortgage, this is brilliant news.  There’s never been a better time to get a mortgage!

Birminghammoneyman Spring Budget 2021 Update

Rishi Sunak’s second Budget as Chancellor brought two pieces of welcome news for the property sector as the Government attempts to transform “Generation Rent” into “Generation Buy” to help stimulate the UK economy, namely the new 95% Mortgage Guarantee and an extension of the Stamp Duty Holiday.

95% Mortgage Guarantee

The name of this scheme is misleading as not everyone that applies is guaranteed to be offered a mortgage, it is still subject to affordability and credit score. The “guarantee” itself is that the Government will ensure Lenders don’t stand a loss if they grant a 95% mortgage to a customer who then subsequently falls into arrears and is repossessed leaving behind negative equity.

This scheme should in theory give Lenders more confidence to lend even though the applicant only has a smaller deposit to put down. Of course, Lenders never want to repossess someone’s home unless it is the last resort, but if that happens then the new scheme would cover any shortfall.

Lenders have been worried about the prospect of home values decreasing so this measure should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements!

The scheme is available to both 1st Time Buyers and Home Movers, it’s available on any property (not just new build) and will run until December 2022. Some major High Street Banks have already signed up to the scheme and it’s likely more will follow later on. It’s still a big challenge for Lenders to cope with the demand they are getting for mortgages due to the difficulties training and supervising staff working from home but they will want to offer as many of these mortgages as they can.

Stamp Duty Holiday Extension

When the Stamp Duty Holiday was launched last year we all hoped life would be very much back to normal by the cut-off date of 31st March 2021 but things didn’t pan out that way as we know. Solicitors are struggling to keep up with the workload and if lots of chains had collapsed then it would have partly defeated the object of the exercise.

Therefore it was good to hear the scheme has been extended to 30th June for purchases up to £500,000 and 30th September for purchases up to £250,000.

The Government certainly sees the property sector as an area that can play a big part in our economic recovery and if you are looking to buy a home or remortgage this year please reach out and we will be happy to advise you.

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Mortgage Payment Holidays FAQ’s

At the start of the Coronavirus pandemic, the Government promised that all borrowers would be allowed a three-month mortgage payment holiday if they needed it. Most lenders followed the Government’s guidelines and did their best to help their borrowers during these hard few months.

We have thought carefully about the possibilities of what could happen to your Mortgage over the next few months. We are working very closely with all of our lenders to ensure that if anything changes, we can inform you right away and recommend the best option for you to take so that you still feel secure and happy with your Mortgage. 

We feel that it is best to summarise what mortgage payment holidays are, what lenders are doing, and who can provide you with help and guidance through these next few months. 

What is a Mortgage Payment Holiday?

Mortgage payment holidays are an agreement entered into with your bank, building society, or mortgage lender to defer your monthly mortgage payments for a set period. In this case, 3-months.

It does not mean you never have to pay the amount back, but the interest you defer gets added to the loan amount, while your capital balance will not decrease. In other words, your mortgage amount will increase slightly, and you will continue to attract interest on the whole amount.

When you are ready to continue the payments, this could mean that your monthly payments get recalculated at a slightly higher level, or your mortgage term gets increased somewhat. Most lenders will probably prefer not to extend your mortgage term as this could take you past their standard retirement ages, but the detail on this will follow in due course.

Dependent on your mortgage deal, you may be able to pay off a lump sum later in the year to bring your Mortgage back to where it would have been.

Mortgage Payment Holidays are available both for those with residential or buy-to-let mortgages, which means landlords also have assistance if rental payments are affected.

What is the Government Proposal?

The full proposal is in detail below:
🏠 Mortgage lenders will offer an automatic 3-month mortgage payment holiday for customers impacted, directly or indirectly, by COVID-19.

🏠 The mortgage payment holiday will apply to customers who are up to date on their payments, not in arrears, and wanting to self-certify that COVID-19 impacts them.

🏠 This means that lenders will not complete an income and expenditure assessment or evaluation of alternate payment options as ordinarily required under MCOB.

🏠 This proposal will allow lenders to be more responsive to customer needs and offer forbearance in a simple way to customers in an environment where COVID-19 also impacts the operation of collections teams made.

🏠 Customers will be made aware that interest will accrue in the holiday period, and they will need to make up deferred payments in the future.

🏠 Customers who wish to undertake a full assessment of their ability to pay or financial difficulty may still do so.

Mortgage Payment Holidays | How do I apply?

We would recommend speaking to your Mortgage Advisor in Birmingham. They will assess your financial situation first before looking to defer your payments as your situation may not yet be pressing.

You are approaching a Mortgage Broker in Birmingham like us, will allow you to explore all of your current mortgage options and could make things feel a lot less stressful.

For a customer, up to date with payments, not in arrears and impacted by COVID-19:

🏠 The customer would contact the lender and inform them that they are affected by COVID-19.

🏠 The lender would accept these details from the customer and offer an automatic 3-month mortgage payment holiday.

🏠 Having no evidence will be sought from the customer.

🏠 The lender makes the customer aware that interest will accrue and will be contacted at the end of the three months to complete an assessment of the customer’s circumstances.

🏠 At the end of three months, an agreement to pay will be agreed with the customer. According to their circumstances to recover any shortfall. (While ensuring that the Mortgage remains affordable and sustainable).

🏠 The lender notifies the customer that if they wished to complete a full assessment now, there might be other forbearance options more suitable to the customer.

What does this mean for my Credit Score?

In some cases, a mortgage payment holiday can harm your credit score, but most lenders have now said that for issues linked to the virus, they will ensure that this is not the case.

You must ask this question to your lender directly and record the response, including the date and the name of the person you are speaking to avoid confusion later. Different lenders are doing other things.

Will I still be able to remortgage or take a Product Transfer with my lender?

At first, everything seemed like it would remain the same, and you would still be able to make changes to your mortgages as usual. However, this has changed in the last couple of days, and lenders have been asking borrowers to avoid making changes whilst you are within a mortgage holiday period. So, at the moment, they are not allowing mortgages and product transfers.

Borrowers nearing the end of their existing product may get forced to move on to the higher lenders variable rate. It might mean that borrowers who act too early could find themselves on a mortgage payment holiday that accrues interest on a costly variable rate.

We would highly recommend speaking to your Mortgage Advisor in Birmingham, and they will determine the best course of action based on your personal and financial situation. If possible, arranging your mortgage transfer first then asking for the holiday would seem to be the most sensible way forward.

My Mortgage got Offered Will my Lender Withdraw the Offer?

At the moment, no Lenders have withdrawn mortgage offers; in fact, some are extending offers past the standard six-month expiration date.

Should I Pull out of my Purchase?

It would help if you did not pull out of your purchase unless, for example, you are worried about losing your job as a result of Coronavirus. We are advising everyone to proceed as usual for now and “wait and see” – you are not committed to completing your purchase until contracts get exchanged.

What “Other Options” are available?

In some cases, lenders can offer you a temporary switch to interest-only to reduce your monthly payments but not to add any further to the loan amount by still servicing the interest payments each month.

It may not be necessary to convert all your Mortgage to interest only, and it may be that putting part of the Mortgage on this basis could give you the breathing space you need.

People with savings may find that remortgaging onto an offset basis could give them a helping boost they were looking for, and they will be cutting down on their monthly payments whilst keeping hold of their savings.

For example, someone with a £400,000 loan and £100,000 in savings would only pay interest on £300,000. Either way, this will massively reduce their monthly mortgage payments.

For others, a straight remortgage to another lender, calculating the cost of any early repayment charges, may well be enough to ease the burden or simply extending the term of your Mortgage.

If you still have any other questions on mortgage payment holidays or want general Mortgage Advice in Birmingham, give us a call today. We want to help you and your mortgage journey through these tough few months ahead. Speak to an experienced Mortgage Advisor in Birmingham today.

Specialist Mortgage Advice in Birmingham

Coronavirus & the Mortgage Market in Birmingham

Coronavirus impact on the mortgage market in Birmingham

This article was originally published on 30th March 2020 and as of the 20th May 2020 the property market has now resumed and this information has become outdated. Everything was 100% accurate at the date that this article was published.

During last week, the mortgage market has suffered thanks to the coronavirus. Everything has come on a bit fast, and we recommend it’s best to catch you up to speed.

We aren’t trying to scare you, and we want to explain what is happening to the mortgage market and do our best to help you through the problems you may face during these rough times.

Coronavirus and the Mortgage Market | MoneymanTV

Mortgage Surveyors

The central dilemma for the mortgage market is that surveyors and mortgage valuers can’t go out and visit properties because the whole property market is on hold. Lenders need to know what they are lending against, so require some sort of valuation before accepting your application.

Some lenders rely on AVM’s (Automated Valuation Model) for valuations on a property. The reason being it’s a way for lenders to receive a valuation without actually going out to the property.

However, when they don’t need to send someone out to look at the property physically, these types of mortgages get restricted and to lower loan-to-values only.

During the last couple of days, as of March 28th, some lenders have been restricting their maximum loan-to-value down to 60%. So, they are continuing to process these types of applications but not necessarily ones at higher loan-to-values.

A lender’s viewpoint

Each lender is taking a different approach. So far, no mortgage offers got withdrawn, and we think that it is just a waiting game at the moment, lenders are just putting everything on hold before rushing into accepting more mortgages.

We have whiteness that some lenders have decided to extend the periods of their mortgage offers from six months up to nine to allow the economy and the mortgage market to get back up and running again.

Mortgage Payment Holidays

Following our recent article about Mortgage Payment Holidays, we want to remind you that you should only take one if you need to. Do your research, talk to a Remortgage Advisor in Birmingham, evaluate your options, and see whether it is the right thing for you.

It is more than likely that they will extend the period of your mortgage anyway, so it could be better just to hold off. You should contact your lender if you are questioning your ability to meet your monthly mortgage payments.

If you decide that this is your best option, lenders are asking for you to get in touch online due to the sheer volume of calls they are receiving.

If you are going to request a payment holiday, check that it won’t affect your credit rating or mark any arrears against your account. Also, don’t just cancel your direct debit and remember that you will need to seek permission from your lender to take a payment holiday.

Speak to a Mortgage Advisor in Birmingham today

The main thing is not to panic. We are here to help you with all of your mortgage problems and get you and your mortgage through these next couple of months. At some point in the coming weeks or months, someone is going to press play again.

We will all be back to normal in the given time. You can still get in touch with a Mortgage Advisor in Birmingham from 8am – 10pm, 7 days a week. Business is as usual. We can’t wait for you to get in touch and help you with all of your mortgage needs.

Birminghammoneyman.com & Birminghammoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited registered in England, registered number 6789312 and registered office 10 Consort Court, Hull, HU9 1PU.

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