Can I get a mortgage if I’m furloughed?

The short answer is Yes.

If you have been furloughed there are lenders who are prepared to consider a mortgage based on your furloughed income – subject to further assessment. There has never been a more important time to use a mortgage broker to arrange and submit your mortgage application. We can help you navigate the ever-changing lender criteria that can be so widely different from one lender to another.


Furloughed Mortgage Assessment

You must make it clear to our advisors exactly what your employer has told you and copies of all communication must be provided.

It is unlikely that we can proceed if your employer has said that you might not be reinstated under the same terms and salary of your original employment contract, or if you have been told that you might be made redundant.

Some lenders are taking applications on a case-by-case basis, taking into account the nature of your employment, type of business and how long you have been employed.


Employed

Most mortgage lenders are matching the Coronavirus Job Retention Scheme. So they will only consider 80% of your basic salary up to a maximum of £2,500 per month, or £30,000 per annum, for mortgage affordability purposes if you have been furloughed.

It will be harder to get bonuses looked at unless they are sustainable and can be evidence over a long period of two years or more. Some lenders are not accepting any overtime, commission or bonuses whilst furloughed.


Self-employed

Two years accounts (self-assessment tax returns) are needed and it must be demonstrated that there is stability within your business sector.

There must be an availability of funds to meet your fixed commitments e.g. rent/utilities.

Some lenders require you to still be actively trading and will want to see your cash flow, requiring an assessment of your business bank statements over the last 3 months.


What deposit will I need?

At the time of writing there are very few lenders prepared to accept less than a 10% deposit for a standard residential mortgage. To get a good reach of lenders it would help if you could put down a 15% deposit at this time. Use our quick mortgage search engine for a no-hassle quick quote and to search the mortgage deals available to you during this time.


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Ben - Author

Author: Ben, Glow Mortgage Advisor (CeMAP, BSc Hons)

Date Published: 29th June 2020


PLEASE NOTE THAT THIS ARTICLE IS NOT PROVIDING MORTGAGE ADVICE. MARKET CONDITIONS ARE SUBJECT TO CHANGE.