An outsourced mortgage broker points to his “get in quick” advice from last week, due to a further major delay in the time lenders take to approve home loan applications.
On Thursday alone, Freelancer Financials explained that it was essential to act quickly to remortgage entrepreneurs who want to mitigate the impact of future increases in the BoE’s base rate.
But now the broker says there is even more urgency to act quickly to lock in a fixed rate as lenders moving to test borrowers’ resilience to the cost-of-living crisis are blocking approvals.
“Not just entrepreneurs”
“Mortgage applications are taking a lot longer to process because lenders are asking for a lot more information than before,” warns John Yerou, managing director of Freelancer Financials.
“But that applies to everyone, not just entrepreneurs, because no matter who you are, lenders want to accurately assess people’s current and future cost of living.”
An expert on contractor mortgages, Yerou says lenders are factoring these higher costs into their affordability calculations for customers, “which will make it harder to borrow.”
“Goods are devalued”
But not all price tags inflate, at least not in real terms.
In a statement this morning, Freelancer Financials revealed to ContractorUK:
“Over the past few weeks, we have noticed more and more lender surveyors are downgrading properties because they don’t think they are worth what buyers are willing to pay.
“[Yet] we don’t expect a sudden drop in prices to hit the market, as right now demand still exceeds supply, which will likely keep prices from falling.
“A little more caution”
Longer term though, even in ‘the coming months’, the broker predicted house price increases will ‘slow down’, in part as buyers ‘be a little more cautious’ .
Freelancer Financials added that the currently extended processing time to get a fully signed mortgage means that not only lenders will “take their time”, but also potentially buyers.
To learn more about contractor mortgages, click here.