Lenders return to 90% lending

Welcome to your latest update in what is a fast moving fast changing mortgage market.

Let’s take a breath first and remember what happened about 10 weeks ago.

HM Government pulled the shutters down on UK PLC which effectively closed the country and confined us to our homes in an effort to slow down the spread of the Coronavirus.

Lenders responded by pulling up the lending drawbridge and many stopped lending all together, with some still not back in the lending arena as of last week.

However, gradually things changed, lending criteria as to who they would and would not lend money to was analysed by lenders almost daily and they way they lend to potential borrowers began changing too.

Over the last few weeks we have seen the loan to value (LTV) limits used by lenders gradually increase and it seems that now Surveyors are returning to work – lenders have the appetite to increase the lending limits as well.

Virgin Money, Ipswich Building Society and AccordMortgages are just three lenders at time of writing that have decided to dip their corporate lending toes back into the 90% LTV lending market.

Put simply this means if you are buying a house for £100,000 the maximum they may be prepared to lend to you would be £90,000 and you as the borrower would have to come up with £10,000 as a deposit.

However, it’s not that simple as they will be closely analysingyour ability to service the loan you are applying for.

For example, some lenders at this time will not lend to you if you are on furlough income.

There are loads more changes to lending criteria that we at Simpson FS are continuously being informed of almost on an hourly basis.

It’s like a mental sat nav that can’t make its mind up which way to go and continuously changing directions every half an hour!

Basically, the criteria to secure a 90% LTV loan has got a lot tighter.

Just because there is a big ‘we are back!’ vibe at the momentfrom certain lenders doesn’t mean everyone gets to access the higher loan to value products but as brokers who act for our clients, we are here to guide you through the ever changing lending maze.

Stay safe and don’t forget – we don’t charge for a chat.