Should I ask for a mortgage payment holiday?
Should I ask for a mortgage payment holiday?
Jane Riley, Partner and Head of Residential Property at Kerseys.
Consider All Your Options
More than 1.2 million home owners have already been given a mortgage payment holiday by their lenders.
That is equivalent to 1 in 9 households having their mortgage payments deferred to for up to 3 months because their finances have been affected by COVID-19.
Although it has been confirmed that this will not affect your credit rating, there has been some concern expressed by brokers that it could make you less desirable as a borrower particularly if you were planning to re-mortgage with a new lender, or take out a new loan.
Individual lenders are ultimately free to decide who they wish to lend to and a request for a payment holiday on an existing loan, could mean that your application is automatically declined.
When a mortgage payment holiday ends, your mortgage payments will be recalculated and will likely increase as a result of the previous payments having been added to the mortgage balance.
So even if you have already requested a mortgage payment holiday, you may want to consider other options with your existing lender such as extending your mortgage term, or switching to an interest only mortgage.
ConveyancingHow Kerseys Can Help
If you have any queries or concerns regarding your conveyancing transaction, please do not hesitate to contact me by email [email protected] or alternatively telephone my direct line on 01473 407122.
