Did you know, one in six mortgages is now covered by a payment holiday, with more than 1.82 million mortgage borrowers having been granted a payment holiday by lenders?
An option for borrowers to defer their mortgage payments have been extended to 31st October to help those that have been affected by the coronavirus, as confirmed by the Financial Conduct Authority (FCA).
Landlords and homeowners that have already taken a payment holiday on their mortgage now have the option to extend if necessary, depending on their circumstances. However, lenders may also offer other alternative options which can be considered, such as reducing the monthly payments, moving to an ‘interest only’ plan for a short period, or even extending the term of the mortgage payments to make it more affordable.
For those that have been able to pay their mortgage during lockdown may be in a worse financial situation recently due to COVID-19. The option to defer mortgage payments may now be needed and it is available under the new guidance.
However, deferring your mortgage payments, if not necessary, can lead to consequences in the future. Although it doesn’t directly impact your credit score, your future mortgage payments will increase. Lenders may also treat you differently as a borrower. The Financial Conduct Authority had also reminded us that our credit scores aren’t the only source that lenders can use to assess your creditworthiness. By deferring your mortgage payments, there could be consequences in the future.
Extending your current payment holiday or taking a new payment holiday may not be the best choice for everyone and should be carefully considered before applying for one. If you are concerned about your financial situation, then please get in touch with us before you make a decision.
Remember, we are only just a call or email away if you require support or expert advice on your financial situation. You can call us on 0121 448 0161 or you can arrange a chat with our financial advisors here.
About Stuart Mosley
Stuart Mosley (CeFA, CeMap, CLTM) founded SJ Financial Solutions in June 2005 having spent 12 years with big corporates such as Halifax and Santander. He felt the personal touch and straight speaking was missing from financial and mortgage advice services and set up SJ Financial Solutions to change this.
If you would like to book an appointment then please get in touch and we can arrange a suitable time to discuss further. We can arrange appointments at a place and time suitable to you, we can discuss your options over the phone or if you prefer email, then this is fine with us.