At the minute it feels that a lot of our posts are about Covid-19 and how it affects a Mortgage application. It is strange really as 4-5 months ago nobody had ever heard of it and yet now it seems to be affecting everything we do.
Localised lockdowns are quite a new concept since the national lockdown was lifted but it seems like it will be something that will be happening for a while, probably on and off until the new year. On the basis that this could be something that affects us over the next 6-12 months, I thought it would be worthwhile to make a post on how it looks like it will affect us.
What is a localised lock down?
Where there is a spike in infection rates of Corona virus, the government has the ability to put certain parts of the country in lock down. This allows the rest of the country to carry on in some normality whilst only affecting those in certain areas or postcodes.
Following the localised lock down in Leicester this week, businesses in those areas need to remain closed. It means that businesses have to carry on they had been previously in those areas and people can only go out for essential travel.
How will the local lock downs affect my Mortgage?
Due to Property valuations not being deemed as essential and also the surveyor would not be allowed in the property anyway, it means valuations and surveys in the areas where the lock down is in place are temporarily put on hold.
That being said, many lenders have increased their capacity to be able to offer desktop valuations. With this in mind, it does not necessarily mean that the application will be put on hold. In general desktop valuations can be carried out where:
- The LTV is below around 85% (ie a 15% deposit),
- The property is not a new build,
- The property is not a flat or apartment,
- The property is in a residential area.
Where the above all fit, it is possible that a desktop valuation can be used to value the property. However, it is not a given it will pass the desktop valuation and so a physical survey could still be needed.
Lock downs can happen in any area at any time. We can not avoid something that may happen after the application goes in, but where you are looking to apply if the lock down is in place we can help.
How can we help?
All of this is still relatively new, however I think like most people we have all found ways to carry on working. We have been dealing with a lock down in one form or another since March time and things have improved.
We are beginning to see a pattern from lenders and where they will use desktop valuations. We are seeing the various property types and types of areas that lenders are more likely to instruct desktop valuations. We can use that knowledge to help give you the best chance of preventing your application being put on hold for an unspecified amount of time. In addition to that, once the lock down is lifted it could also be included in a backlog.
As we are able to work remotely and have been doing for 2-3 years. We have systems and processes in place where we can obtain the information we need via phone and email. We can electronically ID check you, we can accept documents via email and so on. We have been able to work remotely since before the Corona Virus hit and have a simple process we follow to make everything as easy as possible for you.
If you would like to discuss how we can help, do please get in touch.