How to Help Your Clients During Lockdown

While the lockdown has been a stressful time for all, timely advice to clients that have and haven’t been financially hit by the lockdown can go a long way towards contributing towards their financial wellbeing and strengthening your relationship with them. Here’s a quick look at some practical steps that existing and prospective borrowers can consider.

Existing Borrowers

1 If they’ve been financially impacted

Urge them to seek help before missing a repayment.

  • Government support: State governments have been offering payments to affected businesses and individuals that have seen a decline in income due to the lockdown. Encourage clients to check their eligibility for receiving support and get them to register on their respective state government websites so that they receive financial respite as soon as possible.
  • Lender Support: Lenders are allowing affected borrowers to put repayments on hold. Remember, the level of scrutiny from the lender’s end is a lot more than what it was for Covid-19 mortgage support in the early half of 2020. The involved turnaround time with a hardship support application is also longer. Based on your client’s lender prep them for the required paperwork.

2 If they haven’t been financially impacted

In the wake of remote working and almost zero avenues for recreation, most households have seen a rise in their savings. Add to this the fact that lenders check a prospective borrower’s ability to make loan repayments against a ‘test-rate’ which is usually 1-2% higher than the rate at which a home loan settles. This, therefore, means that most borrowers can easily afford to make larger repayments and expedite homeownership. Please work with your clients on a strategy that could include larger repayments, an offset account or both wherein they can put in extra funds into their mortgage and pay it off faster.

Prospective Borrowers

If your clients are financially secure, buying a property during the lockdown could be a great idea. Some important points to note are as followed.

  • The current lockdown has restricted access to many buyers due to
    • Accessibility to the property
    • Adverse financial impact due to the lockdown
  • If your clients are financially secure, they may be in a slightly better negotiating position due to fewer buyers in the market.
  • Make sure that they haven’t compromised on proper checks and due diligence despite the lockdown.
    • Property inspection-pests concerns, structural soundness, council approval etc.
    • Contract evaluation: professional evaluation by a conveyancer or solicitor
  • The lockdown is unlikely to impact the processing time of home loans as banking is an essential service.

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