A 'Holiday' you DON'T want!
Posted on 31st March 2020 at 12:10
The new buzzword / phrase for borrowers seems to be 'Mortgage Payment Holiday'.
Traditionally, a holiday is a time of peace, relaxation, a comfort in the knowledge you have the time and money to enjoy a break.
This 'new' mortgage payment holiday is NOTHING as beneficial, or as enjoyable, as that.
Today, if you are applying for a payment holiday from your current monthly mortgage payments, you are indicating to your mortgage lender that you are in financial distress.....
Mortgage lenders will not record any adverse credit on your personal credit reference report if you implement a formal mortgage payment holiday right now, BUT it will be recorded on their systems that you have asked for an arrangement, that you have contacted them because you need to defer your payments for 3 months, and you have shown (after just one week of this coronavirus imposed 'facility' being announced) that you don't have sufficient savings / resources to keep the mortgage commitments paid and kept up to date without requiring emergency help. This is how it looks to your lender.
That may not be the case for you, but this is how it will be viewed by your mortgage lender and an 'arrangement' will be noted accordingly.
And if you have in your sights a home move, a remortgage, a further advance, a product switch and you need to apply for a new mortgage facility to achieve this, you may be damaging your chances of securing the best value 'high street' deals in the future.
There are so many variables, imponderables, unanswered questions, right now about all of this - the lenders, market, products, criteria, it's all changing by the day at the moment.
There is no absolute guarantee how the lenders will view, help and support in the post-COVID19 era, so why take the chance if you really don't have to?
The mortgage payment holiday is NOT;
a 'don't have to pay' facility
a waiver of payments
an opportunity just to withhold payments because you want to save a bit of money
It IS;
a deferred mortgage payment support for those in absolute financial need
a process to delay the payments
still a continuingly interest-bearing payment, just paid at a later date
only for three months (currently)
Click here to download / view today's updates (pdf 1.4mb) from the UK's residential mortgage lenders and how they can help if you need to contact them. Their updates and telephone numbers are all listed.
Finally - Warning – mortgage payment holidays MUST be agreed with your mortgage lender before you submit a formal application
Do NOT just stop your direct debit or standing orders. These coronavirus imposed mortgage payment holidays MUST be agreed with your mortgage lender first. If you really have to, contact your lender and discuss how to arrange a formal agreement. See our support document here for information and contact details.
NOTE - If you cancel your DD's and standing order payments without speaking with the lender about this first, it will be recorded as a late payment. This means your payment record will then automatically show arrears and could most likely affect your credit file, which as mentioned above, could make it very difficult for you to secure new mortgages (and loans, credit cards etc) in the future.
Do try and keep paying your mortgage, but if necessary then proceed and contact your mortgage lender and apply to agree the payment holiday.
YOUR FIRST ACTION - IF YOU ARE NOT IN FINANCIAL DISTRESS BUT JUST WANT TO SEE IF YOU CAN REDUCE YOUR PAYMENTS - Call us on 01206 577 266 or email your situation to us at SupportDesk@hdconsultants.net and see how we might be able to help you via our Team of qualified, experienced, authorised and independent experts.
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