Survival on furlough during lockdown can be easy to tackle the financial strain. After all, it feels great to have a backup to tackle the expenses so easily. However, those who have applied for a mortgage are uncertain on how the mortgage industry will respond to this change of their income conditions.
People who want to apply or have applied for a property loan have many concerns and doubts. They want to know the possibilities of attaining funds. If you are among them, look at the following points that satisfy your concerns with accurate and relatable answers.
Get familiar with the realities on mortgage possibilities with furlough
It is possible to obtain mortgage despite furlough
All things come later, the first concern and worry of most of the applicants is if they will be able to get a mortgage with furlough or not. The reality is, yes, you can undoubtedly avail funds for your property purchase despite the reduced income. Only that part of your salary that you are receiving will be considered as your income. Some employers are even providing full salary in exchange for an excellent performance by the employee.
If you are getting 60% of your income, the lender is going to consider only that 60%. It is not wise to expect that the mortgage provider should take a hundred per cent, as, after the lockdown, you will start getting the complete salary.
Your salary – £15,000 (per month)
During furlough, you are getting 60% of salary – £9000
The mortgage company will consider only £9000 as your income as it always takes into account the current income status.
Due to the weaker economy in the UK, job security is already at stake. Even employers cannot commit if they will rehire the same employee or not; however, if your company provides a letter to the lender that it will hire you back, you can sound financial secure. It helps get the deal in your favour.
Terms and conditions for the applicants who are on 100% salary
Many employees are getting a hundred per cent of their salaries despite the lockdown. They work from home, deliver the essential performance required by their company and on this condition they are getting the complete monthly income just like regular days. The mortgage applicants in such circumstances may think that because they are getting paid fully there mortgage approval chances are promising.
However, the reality is that for a lender, it is imperative to know if you will stay in the job after the lockdown period or not. It is because many companies are providing hundred per cent salaries to their employees, but once the ‘stay-at-home’ period is over, they may not rehire all of them. If such applicants can prove in any possible way that there is no threat to their job in the coming days, the lenders will get convinced. If you too are in this situation, this is the fact that you should know.
What about the bad credit mortgage applicants on furlough?
Situations for the applicants with bad credit score can be complicated as already employers do not prefer to keep bad credit score people even during the regular days. Now in this pathetic time, situations can be even more confusing for such employees. However, those with excellent work performance can surely save their jobs.
Do you also have a bad credit score and you have applied for a mortgage or want to apply? If yes, then your work performance is an essential factor on the eligibility part. As an applicant, it is better to rely on guaranteed mortgages for bad credit in the UK. These products come with an assurance of guaranteed approval.
Do not forget that the terms and conditions applicable to the furloughed fund seekers will apply precisely. To ensure stronger chances of approval, you need to arrange a significant deposit amount. Keep it as big as possible, like – 20% or 25% of the total property value.
The above are the most common situations to happen with the mortgage applicants with furloughed income. The precise message is that through any possible way, you have to stay financially secure. In addition, there should be a guarantee that you will remain employed in the future too. If you can do that, then approval is not an impossible thing. Procedures can be slow, as the market is cold nowadays, but at least you can keep moving on.