Borrowers who have taken advantage of the facility offered by banks and building societies to take a mortgage holiday (typically for three months) could find themselves being penalised in the future.
Compared to other financial assistance schemes available during the Coronavirus crisis, mortgage holidays have been quick and simple to arrange. Thousands of mortgage holders have taken advantage. However short term advantage might lead to long term disadvantage as home owners might be faced with higher interest rates down the line, or even the possibility of being denied future loans.
It seems some lenders may be back tracking on an earlier promise that mortgage holidays would not have any affect on credit statuses. Almost 2 million mortgage holidays are thought to have been arranged since the outbreak of the pandemic.
The full story can be found in The Daily Telegraph.
Mark Fryer comments: “Just because a mortgage holiday provides quick and convenient solution to the problem of poor short-term cash flow, doesn’t mean it is the right answer in every case. There are many different ways people can access additional funds if Covid has affected a family’s finances. We suggest talking to a financial adviser in the first instance to find what the right solution is for a particular set of circumstances”.
Call Mark Fryer at Fryer Glass on 01276 301103 or email [email protected]