Forget the eyes – nowadays, it is our internet searches that provide a window into the soul.
We often turn to search engines to ask the questions that are on our minds, whether we’re just looking for a quick answer or because it’s something we are embarrassed to ask in person.
Now, Britons’ most common mortgage questions have been revealed, thanks to a new analysis of Google searches.
Many of the mainstream lenders are able to offer a mortgage within 2-3 weeks of an application being submitted, according to the mortgage experts we spoke to
Comparethemarket.com looked at search data from the last twelve months, and discovered that the most asked mortgage question, with 20,960 searches, was ‘How long does a mortgage application take?’
Britons also wanted to know how long a mortgage offer lasted for, how to get a mortgage with bad credit, what an interest only mortgage was, and what a lifetime mortgage was.
Applying for a mortgage can sometimes be complicated, and there is often a lot of jargon to contend with – so it is not surprising that people search online for more information.
This is Money asked Mark Harris of mortgage broker SPF Private Clients, Nicholas Morrey of mortgage broker John Charcol and a spokesperson from the Mortgage Advice Bureau to help provide answers to the five most-asked questions.
How long does a mortgage application take?
The most common mortgage question on Google, this is particularly relevant at the moment given that some buyers are keen to complete before the stamp duty holiday ends on 31 March.
But the answer depends on the type of mortgage application being submitted, according to Harris.
For example, a product transfer – where you stay with your current lender but move to a new deal – can take a matter of days, whilst a more complex mortgage application can take weeks.
‘Once the application is submitted, a lot depends on the lender and the complexity of the application – it may take anywhere between one day to two weeks for an initial assessment to take place,’ Harris said.
If you’re self-employed or the mortgage valuation requires a surveyor to visit the property in person, then you are likely to face further delays.
A firm mortgage offer will follow once your application has been fully reviewed and an acceptable valuation received.
The experts we spoke to said that typically, it would to take two to three weeks from application to offer – but the pandemic has meant that these timescales have been stretched.
‘Unfortunately, during the Covid-19 pandemic, lenders have suffered from staff and resource issues and tasks are taking longer to complete,’ said Harris.
‘Also, given the effect on employment and income, lenders are scrutinising applications in greater depth to see how applicants have been affected.’
How long does a mortgage offer last?
In most cases mortgage offers last for six months, although some offers will only last for three months.
‘If the offer expires, lenders will sometimes agree to an extension – although this will sometimes require a re-assessment by the lender,’ said Morrey.
A typical mortgage offer will last for six months, but this can sometimes be extended
‘For example, the original deal may no longer be available, or a new valuation may be required, or the lender may wish to re-assess your income and outgoings.’
Where an application involves a new-build property, the offer may last longer – potentially up to 12 months, according to Harris.
‘Borrowers should be aware that some new builds have completion deadlines that may not coincide with offer expiry dates,’ he said.
How to get a mortgage with bad credit?
Some lenders will not offer mortgages to people with a history of bad credit, and this was something that Google searchers wanted to know how to get around.
Lenders that are willing to do so often charge a higher interest rate, to reflect the increased level of risk.
‘When getting a mortgage with bad credit, you can expect to borrow less and to pay more in interest in comparison to someone who has an exemplary credit record,’ explained the spokesperson for the Mortgage Advice Bureau.
Having bad credit may mean you are not able to borrow as much on your mortgage
‘High street lenders are generally averse to dealing with those who have bad credit, which can make it pretty difficult.
‘When you apply for a mortgage, it can register on your credit file – and if you apply to a number of lenders to see if they will lend to you, it may be doing additional damage to your credit score.’
‘Your best option, according to Mortgage Advice Bureau, is to contact an established and experienced mortgage broker.
‘They will have access to contacts and deals that are exclusive and not available to the general public. The mortgage broker will carry out a ‘soft’ credit check first, so your inquiry doesn’t negatively impact your credit score.’
What is an interest-only mortgage?
Another common question on Google concerned interest-only mortgages. So what are they?
When borrowing for a home, you can either opt for a repayment mortgage or an interest-only mortgage.
With a repayment mortgage, you will pay back a part of the loan, as well as the interest, each month until you eventually pay off the mortgage.
With an interest-only mortgage, you will only pay the interest each month, with the loan amount remaining the same.
‘It means your monthly payments will be lower but, at the end of the mortgage term, the full amount you borrow is still outstanding and you have to pay the lender back everything at that time,’ said Morrey.
‘When applying for an interest-only loan, the borrower must demonstrate that there is a clear and credible strategy in place to repay the capital,’ added Harris.
What is a lifetime mortgage?
A lifetime mortgage is a mortgage secured on your home, with the loan only being repaid when you pass away, go into long-term care or sell the property.
Two examples of this are retirement interest-only mortgages and equity release mortgages.
Equity release allows you to access some of the equity in your home via a lifetime mortgage
‘Lifetime mortgages often have fixed rates of interest, and in the case of equity release mortgages, the fixed rate is for life and not just two or five years,’ explained Morrey.
He added: ‘They should not be confused with lifetime tracker mortgages, which track a specific index such as the Bank of England base rate – these will likely have an end date and won’t be for a ‘lifetime’ in itself.’
There are strict lending criteria, with the amount you can you borrow depending on your age.
‘Seeking expert financial and legal advice is crucial for this type of mortgage,’ said Harris.
‘An adviser covering both equity release and standard mortgages would be most useful as they can assess the most suitable route forward.’