A mortgage adviser has issued crucial advice to first time buyers after banks have stopped offering mortgages. Watch what he has to say:
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Amid news that banks including Santander and Yorkshire Building Society have suspended mortgage deals, mortgage broker Tayo Oguntonade appeared on Good Morning Britain to explain what first time buyers can do.
Oguntonade said: “What’s happening is that the lenders have withdrawn products for new business, which means that people that have an agreement in principle […] may not have anything firm on the table right now.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.
That assumes people will be accepted for the top fixes.
— Martin Lewis (@MartinSLewis) September 28, 2022
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.
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.”
Lewis also recently stressed the importance of taking meter readings before energy price hikes come into effect on 1 October, saying that many energy users will still be able to submit these readings for a period afterwards.
“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.
