Given we are living through unprecedented times, it is perfectly natural that people are looking for guidance and information as to what will happen next. Virtually every aspect of life has been affected, but it is easy to see why people want to learn about what will happen to their mortgage if they are unable to meet payments each month.
Mortgage holidays were one of the leading steps announced by the Government. It is possible for people to arrange a three-month mortgage holiday if they find themselves struggling financially. One person many people in the United Kingdom trust, and look to for advice is Martin Lewis, from MoneySavingExpert.
On his TV show, Martin said; “Okay, we now have an agreement between the banks and the regulator and the government that they will give people who are struggling a three-month mortgage holiday. This is what that means: it means that you do not have to pay your mortgage for three months.”
Mortgage holders want guidance and clarity right now
Having the matter clarified by a trusted source is of benefit for homeowners. While this isn’t a great time, knowing that there is some leeway in the event of something bad happening is a comfort to homeowners. If the property owner or a partner who also pays towards the mortgage, was to lose their job, they can request a break in their monthly payments.
This will be permitted, and while there will be a minimal increase in monthly payments after the break concludes, it is likely to be welcomed by many homeowners. Martin continued by saying; “What happens is that interest is still charged but it’s trivial and this is all about cash-flow and this gives you the cash-flow. And then let’s say you have 20 years and three months left when you start the mortgage holiday, at the end of the mortgage holiday you’ve got 20 years left to pay the same amount.”
Someone on a £700 a month mortgage will find that after they resume paying their mortgage, their payments will likely be around £710 or £712 a month. This isn’t ideal, but given the alternatives, the vast majority of homeowners will appreciate having the chance to take a break of this nature.
Longer-term problems may require different solutions
Of course, there may be longer ramifications of dealing with the Coronavirus. Right now, people are only focusing on the short-term, and the mortgage break option is an ideal short-term solution. If the situation changes and there is a need to find longer-term and far-reaching solutions, there will no doubt be a revision of what options are available.
While these are challenging times, it is crucial people remain fully informed as to what is happening around them, and what options are available to them. It is best to seek out advice from mortgage brokers or financial experts.
Anyone with mortgage questions should be proactive in seeking guidance or assistance. This is a period of significant uncertainty, but help is always available. Also, it is unlikely assistance will be offered unless it is requested, so it is important for mortgage owners to stay on top of their finances and their situation.