Information for mortgage holders affected by Coronavirus from Tracy Gordon, Director of Operations and Compliance
Mortgage Holiday - Residential
We have been fielding lots of calls from people concerned about their jobs and how they can make their mortgage payments. I thought I should give everyone some information about the “Mortgage Holiday “offered earlier this week by the Chancellor.
Firstly, this is great news for anyone struggling and in the first instance they should contact their mortgage lender. Most lenders are offering the 3-month payment holiday for residential mortgage holders, but some will be offering other options, like partial payments or interest only for a period, which may be more suitable. Borrowers should confirm with their lender that if they take any other option, that their credit file will not be adversely affected.
Please bear in mind that although no payments will be collected for up to 3 months, the payments will be added to the outstanding balance and you will therefore pay a small amount of additional interest on the higher loan for the remaining term of the loan.
With last week’s interest rate cut, now is a great time for anyone who is paying their lender’s “Standard Variable Rate” to check if you can save some money by getting a better deal on your mortgage.
Mortgage Holiday - Buy to Let
Last night, the Government confirmed that its three-month mortgage repayment holiday will be extended to landlords whose tenants are experiencing financial difficulties due to coronavirus. It will also apply to Help to Buy equity loans.
This will hopefully alleviate the pressure on landlords, who will be concerned about meeting mortgage payments themselves, and will mean no unnecessary pressure is put on their tenants as a result. The payment holiday will work in the same way as with residential mortgages.
At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.
Protecting your Mortgage
In times of uncertainty, borrowers look to make sure they are protected should the worst happen.
Again, we have taken lots of calls from clients where we arranged mortgages but they declined to take out a policy to protect their mortgage. This could be life cover, critical illness cover or a policy to protect their income against time off work for long term illness. Unlike some insurance policies which must be taken at outset, the great news is that mortgage protection can be taken out at any time.
For more details on how we can help you to be best prepared and move fast in the purchase of your dream home, contact Mortgage Required on 01628 507477 or book a video call with an adviser
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