This week we sat down with one of our mortgage advisers Malcolm Gorton, to discuss some of the common questions we receive from our clients and followers regarding mortgages and the current state of the market in 2022 . This is what Malcolm had to say:
Q: Is now a good time to buy?
A: House prices have rocketed in the last year or so driven by huge demand, cheap borrowing costs, a growing population and the fact houses are not being built fast enough. Given the ongoing shortage of homes the market will probably remain robust indefinitely. Whilst interest rates have risen lately, they are still incredibly low when compared to long-term trends and at the end of the day when it comes to land – they just aren’t making it any-more! If buying your main residence, getting on the “housing ladder” as soon as you can will always be great advice!
Q: Are interest rates going to keep increasing?
A: Rates are still incredibly low historically so the longer term outlook is that rates will go up however you can be protected against this with your mortgage payments being fixed (more and more lenders are doing longer term fixed for example I am doing a client a 10 year fixed this week at 2%
Q: How do Holiday payments effect my mortgage?
A: Holiday payment mean that you effectively miss a mortgage payment, without it impacting your credit file as its agreed by the lender (assuming it has been pre agreed and the lender has pre confirmed they don’t report it as a missed payment to the credit reference agencies. This is money that still needs to be paid back so ultimately the interest accumulates on the outstanding balance of the mortgage over the holidays and that will have to be paid back – meaning eventually higher monthly payments should the client want to stick to the term remaining