Mortgage payment holiday extended
UK Finance has announced that Lenders have agreed to extend the mortgage payment holiday it offered at the start of the lockdown by a further three months.
When the UK went into lockdown, the government persuaded mortgage lenders to offer a mortgage holiday of up to 3 months to those struggling to pay their monthly payments. People who found themselves in this position could contact their mortgage lender and ask for a mortgage payment holiday. Provided the mortgage account was up to date, the lender would then grant the mortgage payment holiday.
This scheme was originally due to end on 30 June.
However, after some further pressure, this has now been extended to 31 October. This means that not only can those already in receipt of a mortgage payment holiday extend that holiday but also that those who have not applied can now apply up until 31 October and get a mortgage payment holiday of up to 6 months.
As Stephen Jones, UK Finance Chief Executive Officer said: “For those borrowers who have not already applied for a mortgage payment holiday, the industry supports the extension of the availability of payment holidays until 31 October 2020 as this will provide much-needed breathing space for borrowers who need it.”
Payment reductions for borrowers who are struggling financially
In addition to mortgage holidays, lenders will also consider payment reductions for borrowers who are struggling financially but who don’t want to take a mortgage payment holiday.
It is very important to understand that whilst payments are suspended during the mortgage payment holiday, interest will continue to run on the balance of the mortgage outstanding and this will have to be paid back at some stage. This can be done by either increasing your monthly payments or extending the length of the mortgage – it’s all down to your discussions with your lender.
Whatever you do, if you are experiencing difficulties in paying your mortgage, contact your lender to discuss what options are available to you. The last think any lender wants to do is commence repossession action against its borrowers.
What about repossessions?
Repossession is used by lenders as a last resort when the relationship between them and the borrower has irretrievably broken down and mortgage repayments have stopped. Whilst it won’t postpone the inevitable, in an effort to avoid piling further misery on people who, unfortunately find themselves in this position, lenders have agreed to suspend repossessions. However, this agreement only lasts until 31 October 2020 also so if you find yourself in this unfortunate position, we recommend you do something about it as soon as you can. Remember, you’ll always get more for a property you sell voluntarily than you ever will if it’s sold as a repossession. Any improvement on the price you can achieve when you sell will reduce the debt due to your lender.
If you find yourself in this unfortunate position and want to find out how you can get your property on the market for sale, please get in touch with us now.
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