Getting A Mortgage Post-COVID: Restarting The Mortgage Process After The PUP

by | Dec 9, 2021 | Mortgages | 0 comments

Navigating the mortgage process can be a daunting, nail-biting process for first-time buyers. Once you throw a global pandemic into the mix, the experience comes with a whole new set of challenges.

In a survey conducted by Bank of Ireland towards the end of 2020, 48% of respondents revealed that their home-buying plans had been delayed as a direct result of COVID-19.

From a drastic financial or personal change in circumstances to factors outside of the control of would-be homeowners, the global crisis became responsible for halting the best-laid plans of many first-time buyers.

The impact of the pandemic on first-time buyers

When playing the blame game, it’s impossible not to look at pandemic-related unemployment as a major culprit. In the context of Ireland alone, it is estimated that up to 100,000 people will lose their jobs as a result of COVID-19.

Aside from lost income and an uncertain future that goes hand in hand with an ‘unemployed’ status, affected individuals have also found it impossible to secure a mortgage, with those in receipt of the Pandemic Unemployment Payment (PUP) no longer eligible for consideration by lenders.

Even those who managed to retain their jobs have not emerged unscathed, with mortgage applicants whose employers are availing of the Employment Wage Subsidy Scheme (EWSS) also experiencing blanket refusals – even in cases where the employee’s wages are not being supported by the EWSS.

Applicants working in the hospitality industry have been particularly affected by this, with many unable to secure mortgage protection insurance as a result of their profession.

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Other cohorts who also stayed in employment throughout the pandemic find themselves in an unusual predicament. The lack of socialising, weekends away, and foreign holidays during the height of COVID led many people to save an impressive amount, allowing them to build up a decent deposit in a far shorter period than would otherwise have been possible.

However, the drastic increase in property prices influenced by the pandemic has deterred them from pursuing the mortgage process any further at this particular time.

Many first-time buyers have been forced to take a step back from the process due to changes in their personal lives. Whether moving home to create a care bubble with an elderly loved one, or perhaps unable to compete with soaring house prices that show no sign of slowing down, certain people have simply put their property-buying plans on hold in response to extenuating circumstances.

The result of halted applications or flat-out refusals has been heartache, stress, and often bitter disappointment across the board, compounded by the many other obstacles created by COVID-19.

But with certain lending institutions being forced to soften their approach, combined with a society that is once again cautiously operational, the tide is slowly but surely turning in favour of first-time buyers.

Top tips for resuming the mortgage application process

First things first, try to put your past disappointments aside and look at the mortgage application process with fresh eyes, and as a new chapter.

  • Ensure all your ducks are once again in a row in terms of your accounts. Refrain from any frivolous spending – especially direct debit subscriptions to gambling websites – that might show up on your bank statements in the six months leading up to your application.
  • Have visible evidence of regular instalments being paid into a savings account, to show your ability to maintain consistent payments while still affording a comfortable quality of life.
  • Pay off – or at the very least, reduce – any outstanding debts you may have. This will have a direct effect on the amount of the loan you are offered.
  • If you have been recently employed following a period on the PUP, it is advisable to wait for six months before reapplying, as lenders will need to see at least six months’ worth of payslips as proof of reliable income before considering your application.
  • The same applies to self-employed individuals who are once again operational after availing of the PUP. In this instance, you will be expected to prove your business’ functionality through a record of trading that spans at least the last six months.
  • For employed individuals whose employers are still availing of EWSS, it is best to be transparent about this information from the start as a lender can check it on Revenue’s public record at any point. It may mean you will have to stall your application for a little while longer, but you can apply as soon as your employer comes off the scheme.
  • Do some research into any schemes or initiatives you may be eligible for, such as the recently extended Help to Buy scheme, that may reduce your overall costs.

While each of these steps will help you get back on track with your home-owning journey, it can still be a tough process with the pandemic remaining an ongoing problem. Because of this, it is advisable to liaise with a financial advisor to work both with you and on your behalf.

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The benefits of consulting a financial advisor

It’s a tough position when you believe that your eligibility for a mortgage is in no way hindered by your financial circumstances, but a lender is telling you otherwise. It can be difficult to plead your case when you don’t have a deep insight into the industry. This is why it is often advisable to recruit the help of a financial advisor that specialises in mortgages, to ‘haggle’ on your behalf.

According to The Irish Times Deputy Business Editor Dominic Coyle, mortgage brokers are “more familiar in dealing with lenders and know how to press the right buttons”. Enlisting the services of such a team or individual could significantly shorten the length of the process the second time around, and more importantly, lead to a successful outcome.

When it comes to applying – or reapplying – for a mortgage, the team at Symmetry Financial will explain all of the choices available to you in simple, concise language, allowing you to make a fully informed decision. We will guide you on the decisions you need to make, based on your personal and financial circumstances, so you won’t have to second guess yourself.

Find out how we can help you progress with your mortgage application today by getting in touch to arrange your FREE consultation. We look forward to talking you through the process and helping you achieve your home-owning dreams.

If you’d like a free, no-obligation consultation for your mortgage, pension or financial needs, get in touch here, call us on 01 6831673 or email us directly on info@symmetryfinancial.ie.