With the unfolding of the Covid-19, and much publicity around the payment holidays being offered from mortgage lenders, we wanted to wait to see what lenders did before putting information out on Social Media. Here are a few Q&A's that you may have already seen, but for those that haven't, we hope they help.
Q1) What is a payment holiday?
A1) A payment holiday is being offered by most lenders whereby you don't make your mortgage payment for up to 3 months, and that payment is then added to your mortgage balance and the monthly payment is recalculated over the remaining term of the mortgage.
Q2) Can anyone apply?
A2) Anyone can apply, but they are intended for those that are going to find it difficult to make their mortgage payments in these difficult times
Q3) How do I apply for a payment holiday?
A3) If you go to the lenders website, (make sure you have your mortgage account number which you will find on the mortgage offer or annual statement) and on there, most lenders have a dedicated page with information on how to apply. Many lenders will give you the opportunity to phone or fill out a form. If you phone, be prepared for wait times in excess of 1 hour.
Q4) Does it apply to Buy to Lets too?
A4) Many lenders on the Buy to Let side of the business are also offering the payment holidays, so yes is the simple answer. Again, check the lender website as they have been quite clear on this so far.
Q5) Can I only have 3 months?
A5) At this time, then yes, up to 3 months, but with this situation ever changing, then we don't know if this could change in the future
Q6) What should I do if I have other questions?
A6) Call the lender, although the waiting times will be long, or go back to your mortgage adviser who will help guide you or assist with any questions you have
Q7) What will my payments be after the payment holiday?
A7) This is difficult to say at this time as it depends on the monthly payment, remaining term, interest rate etc., but if you think about what your monthly payment is, divide by your remaining term, then that would tell you how much you need to be repaying each year, but there is then interest to pay on that too, but hopefully it won't look as daunting as you initially think.
We've just put a few questions above that we think will help, and the ones we've been asked most commonly from our clients over the past week.
We are still open to help, guide and support our clients in these difficult and challenging times, and if you have any questions and you're not a client of ours, then feel free to ask too!
Stay home and stay safe!