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The furlough scheme, in some respects, seemed like a biblical gift, stopping around 9 million in the UK from losing their jobs as the pandemic hit, allowing them to keep their houses and more importantly, food on the table. Its impact, however, has not always proved to be a positive one. The furlough scheme has caused quite a stir within the mortgage market and consequently, for the millions of those who were looking to purchase a home. 

Firstly, first-time buyers were left stuck as almost overnight, Mortgage Lenders pulled 90% mortgages off the table and requested a minimum of 15% deposit, a decision which left many budding homeowners staying a little longer than planned at Mum and Dad's house. As a Liverpool Mortgage Broker, we found many clients worrying about what the future held during a time of unprecedented uncertainty. However, an even bigger issue came from the furlough scheme: affordability, one of the most important factors in getting a mortgage.

Earlier on into the pandemic, many Mortgage Lenders would accept those on furlough pay, of course back then we were all under the impression lockdown would last just three weeks. As lockdown continued, uncertainty progressed and millions were left on 80% of their wages, it proved to be the catalyst to make the already strict lending criteria that little bit stricter. 

So, what happens now? Are those who are on furlough able to still get a mortgage? And what about those who need to remortgage? Here are your answers, we asked Simon our Mortgage Broker in our Liverpool office what's the down-low on mortgages and furlough. 

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1. Can First-Time Buyers Get a Mortgage if They Are Furloughed?

The market is tough out there for first-time buyers, on our panel of Mortgage Lenders, we have one Lender that will do it on full furlough and a few that will make the decision on an individual case. Other Lenders will take the earned income, so not the furlough pay if on flexible furlough. 

2. Do Lenders require any form of documentation?

All lenders will need either a payslip with no furlough on it or a letter stating the date they are going back and that there will be no more furlough.

3. What happens to those who are on furlough and coming up to their remortgage date?

It’s the same as above but we with some lenders we brokers can do a product transfer with their existing lenders and we can sometimes get better rates that if they go direct.