Your mortgage likely makes up your largest monthly outgoing, and many homeowners will be concerned about their payments as the coronavirus pandemic continues. The government has of course announced that measures will be put in place to support you if you’re struggling with mortgage repayments due to the ongoing outbreak of COVID-19.
In order to support those affected, the government will be providing a mortgage payment holiday of to 3 months for borrowers. It’s part of an overall pledge by the government to support people through the financial fallout, and if you’re self-employed, you’ll likely gain the most benefit.
How do I get the mortgage payment holiday?
In order to take advantage of the mortgage payment holiday you first need to get in touch with your lender. A number of lenders have announced that they plan to offer help to borrowers facing financial struggles during this time, by offering a respite from payments.
If circumstances were normal, lenders would usually assess your finances first, before deciding upon the most suitable form of support. However, under the current coronavirus conditions, this process is being waived in favour of a system that’s more straightforward. So, if you believe that you’ll be impacted by COVID 19, either directly or indirectly, you should contact your mortgage lender asap.
How will I be impacted by the mortgage payment holiday later?
The mortgage payment holiday could grant you a much needed break from all or some of your monthly payments. But keep in mind, that this is designed as a break to give you breathing space, and not free money. Interest will still be calculated over the ‘holiday’ period and added to the loan. Meaning your payment will be increased to cover the amount added once they start back up.It’s advisable to once again speak to your lender regarding this, as they will be able to answer your queries in more detail that applies directly to your individual circumstances. Lenders will also work to find you suitable alternative options should this not be right for you.
How will the mortgage payment holiday affect my credit rating?
Lenders have already stated that they will make efforts to ensure this does not have an adverse impact on the credit scores of those borrowers who need to use it. However, it’s important that you don’t simply stop making your monthly payments without speaking to your lender.
Stopping payments without consulting with your lender will put you into arrears and affect your credit score. Doing this could even affect your chances of borrowing again in the future. Get agreement from your lender in regards to the mortgage payment holiday so that any deferred repayments aren’t counted as missed.
The effects of the outbreak will of course continue to develop, so the 3 month payment holiday may also change to a longer period as social distancing and isolation continues.
Remortgaging can help
If you happen to be approaching the end of your current mortgage deal, then choosing to remortgage can help to cut the cost of what is probably your biggest expense during this critical time. You can start shopping around now for a better, cheaper deal before getting automatically put onto your lender’s standard variable rate.
You can speak to a dedicated and experienced mortgage broker now, who can search the whole market to find you the best deal for you.
Contact us at TaylorMade Finance today, as mortgage brokers in Manchester, we’ll gather as much information as possible from you to ensure that we get you the very best deal we can find. We only approach lenders we know you’ll have a good chance of being approved by.
If you’re currently looking for a mortgage, we also have an online mortgage calculator which can give you a rough idea of how much you could borrow and what your monthly repayments might be.
