Contractor mortgage broker underlines 'get in quick' advice, as approval times slow

A contractor mortgage broker is underlining its ‘get in quick’ advice of last week, due to a new and significant delay in how long lenders are taking to approve home loan applications.

Only on Thursday, Freelancer Financials explained that acting quickly to remortgage was key for contractors who want to mitigate the impact of future increases in the BoE base rate.

But now the broker says moving fast to lock-in a fixed rate is even more urgent, because lenders deciding to test borrowers’ resistance to the cost of living crisis is stalling approvals.

'Not just contractors'

“Mortgage applications are taking much longer to process due to lenders asking for much more information than before,” warns Freelancer Financials’ chief executive John Yerou.

“But this applies to everyone, not just contractors, as no matter who you are lenders want to accurately gauge people’s current and future living costs.”

An expert on contractor mortgages, Yerou says lenders are factoring such higher costs into their affordability calculations for customers, “which will make it more difficult to borrow.”

'Properties being down-valued'

But not all price tags are inflating -- at least not in real-terms.

In a statement this morning, Freelancer Financials revealed to ContractorUK:

“In the past few weeks we’ve noticed that more of the lenders’ surveyors are down-valuing properties, because they don’t think they’re worth what buyers are prepared to pay.

“[Yet] we’re not expecting a sudden price reduction to hit the market, as right now, demand is still outstripping supply, which is likely to keep prices from dipping.”

'Bit more caution'

In the longer-term however, even in “the coming months,” the broker predicted that house price increases would “slow,” partly as buyers “exercise a bit more caution.”

Freelancer Financials added that the currently extended processing time to get a mortgage fully signed off means it won’t just be lenders ‘taking their time,’ but potentially buyers too.

Find out more about contractor mortgages here.