Expert mortgage advice: part three
This is the third blog in our series from Rob Starr, CEO of Seico Insurance & Mortgages Ltd. Here Rob discusses valuations, insurance options and purchases.
Please use the links below to jump to the section that interests you.
Can my property still be valued?
Whilst not needed for rate switches, for some re-mortgages and for all purchases, you’ll need to have an up-to-date valuation of your property. Before now, most lenders would rely on visits to properties to establish the true value of a property, therefore the lockdown has meant this is no longer possible. Initially this saw a number of lenders withdraw completely from the market.
However, we are now seeing lenders moving to online valuations, much like the team at Mishon Mackay. This allows lenders to feel a level of comfort that the property is being used as security does hold the value they need. This situation has had the biggest effect on the Loan to Values offered because desktop valuations are traditionally lower than true valuations. In light of the current situation, lenders are now starting to become more comfortable doing this online and in truth we may see this starting to become the norm, even post COVID-19. Should that happen, it will reduce the valuation cost considerably and also reduce the time it takes to complete the application – so not all bad news.
Life insurance, critical illness cover and income protection
Now, more than ever before, we have seen a significant increase in insurance applications as people start to understand the true value of themselves to their family. After all, you insure your car, so you should definitely insure yourself!
Some insurers are no longer offering cover because they cannot get a medical report on a new client. Also, some insurers are increasing rates because of the current climate and the threat of recession. However, some insurers are going the other way and reducing rates, removing the need for medicals and offering greater cover. How do you know which one is best for you? Again, go to your expert. Your mortgage broker or your financial adviser is likely to have all the insurance company details to hand. By using a broker, you get instant access to all insurers and understand within minutes the best available policy for you.
Will purchases come back?
In short, yes! Contrary to some reports in the media, lenders are still looking to issue offers for house purchases. Understandably there will be delays in exchange and completion, but you can absolutely be ready for when the lockdown ends by having an offer or a decision in principle in your hand. This is a powerful statement when you are ready and able to buy again. This applies to both home purchases and buy to lets.
Top tip: A mortgage broker will have all the information you need to help you make an informed decision. With more insight to hand, you can be sure that you’re making the right decision.