There are reports that the chancellor Rishi Sunak is currently working with the FCA and industry to help put further processes in place to extend mortgage payment holidays. These will apply to all those people who are still in financial difficulty because of the Coronavirus. Although a decision has not been made yet reports suggest the are looking at ways to continue support when it runs out at the end of June.
However, the importance of explaining the consequences of taking a payment holiday must by marked out in black and white according to a number of experts.
Martin Lewis ‘The Money Saving Expert’ explained last week ‘The FCA has confirmed, sadly, that while credit files shouldn’t be impacted by mortgage or other payment holidays, lenders are still allowed to take them into account when making their acceptance decisions.’
“It’s impossible to say yet how widespread this will be or how substantial the impact will be we’ll start to learn that over the next year.
“Each lender’s assessment process is different, it’s a dark art that’s hidden from the public and never published, so this is likely to be yet another factor applicant’s will need to navigate.”
However, for a large percentage of people they have no option, due to the financial impact covid-19 has had on their personal circumstances and Mr Lewis did state that you should take the holiday if it is imperative due to cash flow reasons.
In regards to extending payment holidays the general consensus is that given the huge impact and downturn on the economy a further extension seems very sensible.
But there is no doubt this cannot go on forever and the government will need to devise a clear and dynamic strategy on how to bring this to a close.
If you were unaware of the option to take a payment holiday on your mortgage account, loans or any credit cards contact the respective lenders website. There you will find the relevant information on how to apply for the payment break.