The Mortgage Race: High LTV mortgages

Finding your new home is an exciting moment, but ensuring you have a mortgage in place is just as crucial to moving success.

Since lockdown eased earlier this year, there has been increased demand on the property sector with pent-up demand from homeowners looking to find their next move. With Chancellor Rishi Sunak raising the threshold for Stamp Duty to £500,000 until 31 March 2020, initial demand has continued and with lockdown focusing our attention on our home space, more of us are looking to move. Recent statistics report property prices are booming – in September 2020 alone, house prices rose by five per cent.

But while homebuyers’ attention inevitably centres on finding the perfect home, many would be wise to spend time ensuring they have the right property finance in place to enable them to progress their plans. While Prime Minister Boris Johnson announced initiatives to improve access to five per cent deposit mortgages for first time buyers at the Conservative Party Conference, the reality is many homeowners still require high loan to value (LTV) mortgages to purchase property.

High LTV mortgage search

Since the last credit crunch, lenders have been cautious in offering high LTV mortgages and these are typically difficult to secure. In recent months, lenders offering these type of high LTV mortgages will release a limited amount of lending and it is often a scramble to secure a deal which often last for a few days, if not hours, before the opportunity is withdrawn.

In an already complex property finance market, it has never been more evident that working with a whole of market mortgage broker is crucial to securing the right product for your circumstances. With daily updates on new products from every lender in the market, they will have a holistic view of which mortgage will suit your needs.

Independent advice

A whole of market mortgage broker will also often have access to lenders and mortgage products which are not directly available to the public, so it’s important to check that the broker you work with is not bound to a single or limited portfolio of lenders. In particular, be aware that some estate agents will work with one or a select range of lenders and may be restricted to a limited range of mortgage products that can be arranged on your behalf. In this instance it pays to check their small print.

For example, one high street lender currently offers a 90 per cent LTV product but the product has an unusual application process. An applicant calling directly may struggle to meet the criteria without an understanding of the mortgage application process, and it is the expertise of a mortgage broker to understand and navigate this on behalf of their clients.

Exclusive mortgage deals

For many homeowners, the process of applying for a mortgage can be beset by complications or unusual circumstances which mean they do not meet the ’typical’ criteria required of a high street lender. Again, a whole of market mortgage broker will often have the knowledge and personal connections with a wide range of lenders to enable them to find and secure appropriate lending which an applicant may not achieve directly.

While a mortgage broker will typically charge a fee for helping you to secure a mortgage for your property purchase, they can often secure funding quickly, leveraging their strong day-to-day relationships with lenders, and enable you to access deals potentially unavailable to direct applicants. At a time when many high street lenders are estimating an eight week wait time for an initial appointment, this speed can be a huge advantage for homeowners in a ‘hot’ market.

NM Finance charges no upfront fees and will save a homeowner time and potentially money by identifying the best deal, perhaps from a lender that you haven’t even heard of. The additional advantage of using an independent, whole of market mortgage broker is that they will offer best advice for your individual circumstances. By working with a trusted broker who gets to know you and your family’s circumstances, they can suggest ways to improve the range of mortgage products available to you.