Can I Get A Mortgage After Being Furloughed?
It is understandable many people and households have a lot of questions about their finances right now. Your circumstances might need you to review both the short and long-term impact of dealing with COVID-19. Housing and mortgage matters are amongst the most frequently asked questions right now, and the impact of being furloughed is a crucial issue for a lot of people.
Is it possible to get a mortgage after I have been furloughed?
If you are currently furloughed, you likely have a few short-term issues you want answering. You might also have some long-term matters to review, and if you plan on buying a home soon, this is likely to be in your thoughts.
Therefore, it is positive to know there is no reason why being furloughed from your place of work will impact your ability to obtain a mortgage. If you meet the general eligibility criteria imposed by a lender, you are classed as being in employment, so you should be unaffected.
Of course, each lender will have their views on this matter. There is a chance some mortgage lenders will approach applicants who have recently returned from furlough leave with caution. If a lender believes the applicant’s job is at risk, they will scrutinise the application in greater detail.
Not every person who is on furlough has a job which is at risk. However, given the cautious nature of lenders, this is likely to be considered. It might mean a lender offers a less appealing mortgage rate than they would have. Each application is reviewed on its own merits, and being furloughed+
If I am still on furlough, can I apply for a mortgage?
With the furlough scheme being extended to October 2020, there is a chance people will be on the scheme for a longer period. If you are still on furlough when you apply for a mortgage, there is a chance that lenders will scrutinise your application more closely.
There is so much uncertainty in the market right now that no one can say for certain what will happen. After all, each lender has their criteria, and makes their own decisions. However, if there are question marks over your job, or the current financial situation has led you to miss payments which affect your credit score, your mortgage application might not be as robust as you would like it to be.
Can I remortgage after a furlough?
There is no reason why you cannot. With interest rates being favourable, it is easy to see why many homeowners are looking for ways to consolidate their financial matters, and a remortgage is a sensible idea for many homeowners.
If you are currently on furlough, or you have just returned from furlough, this may hamper your chances of arranging a suitable mortgage. However, it shouldn’t be viewed as a barrier to remortgaging and improving your finances. The biggest concern would be if you missed mortgage or other financial payments without having an agreed holiday in place. If you don’t have that issue to contend with, there is no immediate reason you cannot arrange a mortgage.
Applying for a mortgage is the last thing many people are considering, but for some individuals and households, now is the right time. Mortgage lenders are still active, so anyone interested in arranging a mortgage, should prepare themselves for the process, and speak with industry experts.