Chancellor, Rushi Sunak, recently announced that anyone struggling financially as a result of the Coronavirus outbreak will be able to take a three-month mortgage repayment holiday.
This includes homeowners, landlords and Help to Buy purchasers. This means that ALL lenders will now have to honour the three-month time frame.
Although this won’t be suitable for everyone, it could provide some much-needed help if you are struggling. Let’s take a look at everything you need to know about mortgage payment holidays to help you better understand your options during this difficult time.
A mortgage repayment holiday is an agreement with your lender allowing you to temporarily stop or reduce your monthly mortgage repayments.
The repayment holiday will be available to borrowers who are up-to-date on their mortgage payments and not already in arrears.
You’ll need to get in touch with your lender directly if you believe you’ll struggle to make your mortgage repayments over the coming months.
You will also need to look at your mortgage terms and conditions to see if you’re eligible for a mortgage holiday – the criteria will vary from lender to lender.
Yes, you will have to pay these back. Interest will accrue for the period of the holiday and the payments that you miss will be added to the loan and repaid in the future. This could potentially be over the remaining term of the loan.
The credit reference agencies are in communication with lenders throughout this turbulent time.
It’s anticipated that borrowers’ credit files will not be negatively affected as a result of the three-month payment suspension.
Lenders have been under extreme pressure over the last few days to answer the enormous uplift in queries.
At a time when they have significant operational challenges, there may be a delay in responding to your call/correspondence.
If you are concerned, I would urge you to keep trying. There also may be an online form or link to request a payment holiday on the lender’s website.
Whilst there is no doubt that many lenders are struggling to manage the operational implication caused by Coronavirus, the availability of mortgages has, to date, not been impacted significantly.
So, if you are looking for a new mortgage or will require a re-mortgage in the next 6 months, please get in touch.
In particular, if you are looking to re-mortgage in the next 6 months, but will require a payment holiday, please do speak to us before engaging your lender, as it may influence the mortgage products available to you.
Whilst none of us know what the coming months will bring, there is a possibility that mortgage funding may become restricted.
This is particularly true if you have specialist borrowing requirements such as being self-employed, have multiple income sources or have missed any payments.
Exploring options sooner rather than later may prove sensible, so do get in touch with us if you’re considering getting a mortgage or reviewing your existing one.
Here, we have a dedicated team of mortgage experts on hand to offer you professional advice and guidance.
Whether you want to book a mortgage appointment or have a chat about the mortgage market, get in touch.
We can take appointments over the phone, via video conference or face-to-face, depending on your preferences.
Call our team today on 0161 443 4830 and book your free consultation.
Or click here to book your appointment online.
* Your home/ property may be repossessed if you do not keep up repayments on your mortgage.