Filter Posts

Editors Choice

Coronavirus Mortgage Questions

Agreement in Principle

What questions will a mortgage adviser ask?

Remortgage

Getting a 30 Year Mortgage Aged 40 Plus

What’s the benefit of a ‘fixed rate’ mortgage product?

Contractor Mortgages

Coronavirus Mortgage Payment Holiday Information.

- Leave a Comment
Reducing monthly expenditure

We have now received further advice from the following lenders; Santander,  Natwest, RBS, Barclays, HSBC, Platform, Halifax and TSB.

Please note that payment holidays will not constitute free money. Under Financial Conduct Authority rules lenders must ensure that any “forbearance” will still assume an eventual full repayment of arrears. Lenders have said that they will make every effort to ensure that if you take a payment holiday it does not negatively impact on your credit score, they have not specified what their view will be about future lending. We would advise that a mortgage payment holiday should only be sought if you are having difficulty paying your mortgage.

We are happy to discuss individual cases and options so please do not hesitate to contact us. We have also put together a short Q&A on our website. We will be adding updates to our Facebook page and would urge you to share helpful information with friends and family who we are also happy to advise.

UK Finance the governing body for banks and building societies have issued the following guidance

KEY POINTS

  • A payment holiday will be available to all customers who are up to date on their mortgage payments.
  • A payment holiday will also be available to all Buy-to-Let landlords whose tenants have lost income because of the impact of COVID-19. Landlords are expected to pass on this relief to their tenants to ensure that they are supported during this time.
  • Customers will still owe the money where a payment holiday has been granted and interest will still accrue, so if you are able to make part of your normal mortgage payment to reduce the money you owe or your interest charges then you should consider doing so.
  • Firms will make every effort to ensure that the payment holiday does not negatively impact on your credit file.
  • If you are already in arrears, you should contact your lender as soon as possible. Lenders will review any change to your circumstances to ensure that payments remain sustainable.
  • If you are already experiencing financial difficulty, lenders have also agreed a three month moratorium on residential and buy-to-let possession action (from 19 March 2020), meaning that no homes will be repossessed at this difficult time.

What is a payment holiday?

With a payment holiday you will not have to make any monthly mortgage payments for a set amount of time, in this case up to three months.

However, it’s important to remember that you still owe that money and the interest on your mortgage still accrues during a payment holiday.

At the end of the payment holiday your provider will contact you to assess your circumstances and agree a manageable way for you repay the interest charges incurred and make up the deferred payments. Each lender will have a range of options available to help you to do this.

Will I be eligible for a payment holiday?

To be eligible for a payment holiday you will need to be up to date on your mortgage payments.

If you are a Buy-to-Let landlord, it will be available if your tenants have lost income because of the impact of COVID-19.

There a number of options available and payment holidays aren’t always the most suitable solution for everyone. By speaking to your mortgage provider, they can tailor the best option for you.

How do I apply?

If you are concerned about making your mortgage payments during this time you should contact your mortgage provider as soon as possible. You don’t need to provide any documentation; you will just need to self-certify that your income has been either directly or indirectly impacted by COVID-19.

If you are a Buy-to-Let landlord, you will need to self-certify that your tenant’s income has been impacted by COVID-19. Landlords are expected to pass on this relief to their tenants to ensure that they are supported during this time.

At the end of the payment holiday your provider will contact you to assess your circumstances and agree a manageable way for you repay the interest charges incurred and make up the deferred payments. Each lender will have a range of options available to help you do this.

How long will it take to for my provider to process my application?

Firms are doing their best to support their customers during these unprecedented times. However, the spread of COVID-19 is also having an impact on their own staff and applications will be dealt with as quickly as possible.

If I take a payment holiday what will happen to my credit score?

Mortgage providers will make every effort to ensure that if you take a payment holiday it does not negatively impact on your credit score.

What happens if I am already in arrears?

If you are concerned about the impact Covid-19 will have on your income, then you should contact your mortgage provider as soon as possible. Lenders will make every effort to support people already in financial difficulty and will make this process as simple as possible.

Mortgage providers have agreed to a three month moratorium (from 19 March 2020) on residential and buy-to-let possession action, meaning that no homes will be repossessed at this difficult time.

Follow us on Facebook for continued updates. Please share any information that you think may be useful. We are happy to advise friends and family if they have concerns.

Leave a Reply

Your email address will not be published. Required fields are marked *