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How to get a Mortgage during a Recession?

As the UK slowly return to some sort of normality since the Coronavirus lockdown, some homebuyers may be looking to a recession-proof their finances, including improving their chances of getting a mortgage.

Deepest Recession on record

The UK has fallen into the deepest recession on record, with Sheffield being the worst hit within South Yorkshire, following the lockdown in March, which was intended to slow down the spread of coronavirus. The UK economy has shrunk 20.4% between April and June compared to the first three months of 2020.

However, there is light at the end of the tunnel, the UK economy grew by 8.7% in June compared to May, Stephen Kerrigan, Sheffield Fee Free Mortgage Advisor pointed out. The recession is likely to already ended and a strong rebound – potentially, even double-digit growth is expected for the third quarter.

Stephen Kerrigan also commented: “Headlines will focus on the record fall in GDP for the second quarter, as the economy contracted by 20.4% It follows a smaller contraction in the first quarter and therefore confirms the recession all had expected as the economy struggles to cope with the coronavirus pandemic. However, within the quarterly figures are clear signs of a rebound.”

People on Furlough Affected the most

With millions of people having being furloughed in Sheffield and the surrounding areas, while some others sadly encountered job losses and pay cuts, now is the time when many homeowners and buyers will want to keep an eye on their finances. That’s why Stephen Kerrigan of Mortgages Remortgages from Sheffield has shared some tips on how to recession-proof your finances.

Set up a Financial Buffer

The financial pressures of a recession, combined with historically low-interest rates, creates challenges for consumers when they are managing their finances, However, there are ways that people can prepare for this climate.

Getting on top of things

This means that it can be more difficult for consumers with average-to-low credit scores to apply for credit cards, mortgages or loans. So, it is important for consumers to take steps to strengthen and maintain a good credit score.

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