Mortgage adviser issues advice to first time buyers after banks stop offering mortgages

A mortgage adviser has issued crucial advice to first time buyers after banks have stopped offering mortgages. Watch what he has to say:

Oguntonade said: “What’s happening is that the lenders have withdrawn products for new business, which means that people that have an agreement in principle […] may not have anything firm on the table right now. 

“However, it is very likely that the lenders will start bringing new products back to the table in about a week or so. 

“They may be repriced. They may be slightly more expensive, but the products will come back. 

“What I would say to people […] is just sit tight. It’s very, very hard as a first time buyer because it’s a very stressful process. 

He added: “But sit tight, continue to look for houses if you haven’t found one just yet, and hopefully the lender that you’ve got an agreement in principle with will bring products back to the market soon.” 

The topic is something MoneySavingExpert founder Martin Lewis has also address, having tweeted earlier today, having shared a hypothetical example to help explain what’s going on. 

He wrote: “For every £100,000 of mortgage, you'll pay roughly £600 a year more for each 1% pt interest rate rise. 

“Top fixes today are 3%ish more than a year ago (so £1,800 per £100,000). 

“If UK rates rise to 6%, as some predict mortgages'd likely rise more than another 3% again. 

“BUT that assumes people will be accepted for the top fixes. At those rates of interest though many more will likely fail the affordability checks - which means likely sticking with their own lenders (poss costlier) fix or moving onto standard variable rates, which are even higher.” 

“It makes very little tangible difference,” he added, saying you also don’t need to submit the reading on the day.  

“Most firms will let you submit it afterwards and backdate it,” Lewis said.