Find out what you can do to ease the stress of the current situation.
With the spread of COVID-19, we’re now facing challenging times, at least for the short-term future. But even if you think things look bleak for you at the moment, knowledge is power and there are things you can do to take the pressure off.
You may be worried about job security and what happens to your house if you lose your job, or if you’re self-employed and your income starts to dwindle. Fortunately, help is at hand. On 17th March, Chancellor Rishi Sunak announced that homeowners struggling to pay their mortgage due to the impact of COVID-19 can apply for a payment holiday.
So how do mortgage repayment holidays work? You can apply for a mortgage holiday of up to three months which means that your mortgage payments are paused, and you pay nothing during this time. You need to be up to date on your mortgage payments to apply, and it’s important to note that you will accrue more in interest and it will take you slightly longer to clear your mortgage. Lenders are likely to give you a swift answer and fast-track the decision without you having to complete an affordability test.
Reducing financial pressure
In addition, there may be other options available to you that won’t result in accruing more interest but may help to ease any short-term financial pressure you may be facing. You may be able to move your mortgage to an interest-only mortgage for a fixed period or extend your mortgage term, which means that your monthly payments would be reduced.
You may be wondering if taking a mortgage break will affect your credit score. The Financial Conduct Authority says its guidance to lenders makes it clear that taking a payment holiday should not negatively impact on your credit file.
If you would like to take a mortgage break or you are in need of advice, please contact our friendly team here at Monica Bradley Associates, and one of our experts will be very happy to guide you through the options available to you. Our friendly team are available for telephone and video consultations, which means you can talk to us and obtain the advice and answers you need while keeping yourself and your loved ones safe.
Rental payments during lockdown
If you are currently renting a property and struggling to make the payments, you are advised to talk to your landlord straight away and see if you can come to an arrangement that works for both of you. Buy to let landlords may be able to obtain a mortgage holiday if their tenants are experiencing financial difficulties due to COVID-19. The government has stipulated that landlords won’t be able to start proceedings to evict tenants who can’t afford to pay for at least three months. If you do take a rent payment break for three months, you will be expected to work with your landlord to develop an affordable and realistic repayment plan based on individual circumstances.
If you are worried about your income, remember you can seek financial help. Support is available for employees and self-employed individuals. Visit the government’s website for more information at: www.gov.uk/coronavirus
So if you are worried, be proactive… you may be surprised to hear there are many things that can be done to ease your worries. Please pick up the phone and talk to us – we’re here to help.