Millions struggled to keep on top of household bills and debts when the pandemic forced businesses to shut and pay was slashed.
Missed payments can harm your chances of getting a mortgage in the future, but experts say past credit mishaps do not mean all hopes of future borrowing are lost.
Nick Morrey, product technical manager at mortgage broker John Charcol, says: ‘Do not panic if you missed some payments last year, but it is important to face up to your situation and start repairing your credit score quickly.’
Struggle: Millions struggled to keep on top of household bills and debts when the pandemic forced businesses to shut and pay was slashed
News Analysis: Offset – ‘Use it before we lose it’
Experts say borrowers, brokers and lenders are all missing out due to the industry’s non-promotion of offset mortgages and it’s all about education
By Gary Adams 13
th May 2021 12:18 pm
‘Undersold’, ‘misunderstood’, ‘complex’… the adjectives that describe offset mortgages aren’t the most flattering, but the somewhat unusual circumstances of the last 12 months may have created an environment and borrower need that could thrust the little mortgage product that could onto the centre stage.
“Through the coronavirus pandemic, over six million people in the UK have become ‘accidental savers’ due to a maintained income alongside reduced outgoings. That’s millions of people who could be looking for a way to make their savings work harder,” says Coventry Building Society head of intermediary relationships Jonathan Stinton.
The government’s Mortgage Guarantee Scheme is not being used by many lenders, to the surprise of Nick Morrey, product technical manager at John Charcol.
Chancellor Rishi Sunak confirmed the launch of a Mortgage Guarantee Scheme in the Budget, to help those with lower deposits onto the housing ladder.
Morrey said: “Lenders will not divulge exactly why they have said ‘no thank you’ to the scheme, but ultimately it means they have far more control over the whole transaction with regards to pricing and criteria.”
He also pointed to lenders not having to set up robust systems to track and monitor any and all mortgages sold that are part of a scheme financially linked to a third-party.
First-time buyers are more likely to be rejected for a mortgage than they were a year ago: Here s how to make sure it doesn t happen to you
Just one in five first-time buyers were able to get a mortgage on the first attempt, according to Aldermore Bank s first-time buyer index
More than two in five said they were rejected for a mortgage more than once
Poor credit history, insufficient deposit and admin errors among reasons cited
We asked experts how buyers can boost their chances of being approved