Recently, lenders stopped accepting income from the Job Retention Scheme (also referred to as furlough) as eligible to count towards affordability. So, if you have received income from any of the government’s COVID-19 job support schemes, are employed in a ‘high-risk’ industry, or may normally have trouble securing mortgages, it might soon get even harder.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Why will getting a mortgage be harder for some borrowers?
The Job Retention Scheme (JRS) was extended at the end of 2020 alongside the tighter lockdown restrictions, but it ends next month, with the Job Support Scheme (JSS) available in instead.
With the reduced provisions in the JSS, keeping up an acceptable level of income for future affordability assessments will certainly be hard to do.
With unemployment and personal debt levels rising, a large portion of the UK population – 20 million adults – is already at risk of falling behind on debt payments according to the Financial Conduct Authority.
The burden on the self-employed
The self-employed have experienced tough times throughout the pandemic, and putting aside the reduction in benefits from the Self-Employed Income Support Scheme, millions haven’t even been able to qualify.
The right lender will be sure to review your income over the last several years during their affordability assessment, but some might have a harder time than others, depending on their individual situation.
It’s not just potentially high-risk borrowers that are coming under more scrutiny.
Even if you’ve had consistent income throughout the coronavirus pandemic, prospective lenders are pressing for proof and explanations that the lack of disturbance to your income checks out.
Lenders are also being stricter with additional income, such as overtime, bonuses, tips, and commission.
Make mortgages easier
If you work with a mortgage broker, they can help you find a lender that is willing to take zero-hours contract income from NHS nurses and locums, care workers or supermarket workers, who have all been consistently working during the pandemic.
Having a lender that understands the intricacies of your industry will make the whole mortgage application process much smoother.
Dental & Medical Financial Services have been cultivating relationships with mortgage providers for years. Along with our experience, we offer a wealth of knowledge about the mortgage process and the specialist needs that come with working the dental and medical fields. If you’re in the market for a property, get in touch.
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