Friend of the PDPLA and mortgage advisor, Carol McFadden followed up on last months guidance to landlords where students have asked for rent holidays with the following comments about the availability of 'payment holidays' for Buy To Let mortgages.
Carol said, "I thought it worth a mention that SOME lenders have extended their policy on three-month payment holidays to BTL mortgages. Of course, this solution will not be available to everyone, but it might be worth consideration in appropriate circumstances.
To see if a payment holiday would apply on mortgaged properties…………………
- There are guidance notes on the GOV.UK website
- Members should FIRSTLY visit their LENDER'S WEBSITE to see if they can find out whether a payment holiday might be available. Where they are available most lenders are now including lots of information on their websites to avoid the need to call in. There's usually a help line, or a dedicated email address, and sometimes a list of information which needs to be included for consideration.
- If members can see nothing appropriate there, then call the lender to see if payment holidays are available. If they are, follow your lenders' procedures to apply. If they are not, then this option must be discounted and the options in the previous article are more realistic.
- Always remember than a payment holiday is a deferment of interest payable (not free) and any sums owing will be payable at the end of the mortgage term and will increase the overall balance.
- For those Members who have used me as their adviser on the original mortgage, I might be able to assist with finding information, but I can't make enquiries on an existing mortgage which I did not originally advise on (best way is to contact either your own adviser or the lender direct).
- Finally, if any Member thinks that they might be unable to make a mortgage payment in full and on time, please, please speak to your lender. The general message has been that lenders are acting as quickly as possible with the Government recommendations but the expectation is still that borrowers are responsible for full mortgage payments in the same way until a suitable arrangement is individually approved.
- Finally – and I have to include this – the above is not advice, simply information passed on with the best of intent in the hope that it might be of help to you / your Members. It is the responsibility of the Members /Mortgage Holders themselves to make individual enquiries and to act within contractual guidelines."
And a final, obvious comment from the PDPLA – if you are considering asking for a payment holiday, do ensure that you are clear on whether, if and how this will affect your credit rating and suitability for any future mortgages or other credit arrangements.