Are you entitled to a mortgage holiday?
Over recent months many homeowners have struggled with their mortgage repayments, and whilst some people are struggling with repayments every month, indicating that they need to find a long term solution such as cutting back on other costs or finding a more affordable mortgage deal, others find that they are finding it impossible to meet the mortgage repayment for the odd month or two. Many of those that suffer difficulties with their mortgage repayments on occasion rather than continuously turn to other forms of credit to make the repayment such as an expensive credit card – or in some cases simply allow their account to fall into arrears.
However, according to industry professionals there could be a far easier and more convenient solution available for many homeowners in the form of a mortgage repayment holiday. Officials from Money Expert have estimated that around 58% of us could be entitled to take a mortgage repayment break, as this facility is included in many mortgage loan contracts. In fact, officials estimate that around half of over two thousand variable, fixed, and discounted mortgage deals allow for this facility, although it is not encouraged by lenders.
Whilst lenders will want to know why you need to take a mortgage repayment break most are only too well aware of the financial difficulties facing most households due to rising petrol prices, soaring food costs, increased bills, and high mortgage repayments. Therefore many lenders will be understanding and sympathetic when homeowners contact them about taking the mortgage repayment break from time to time, although this obviously cannot be used as a long term solution on a regular basis.
Alistair Darling, the Chancellor, has been pushing for a number of solutions to help those struggling with their mortgage repayments, one of which was to promote mortgage repayment holidays. However, if the estimate is right then almost 60% of us may be eligible to take these payment breaks anyway, which could really help out in the short term.
One official stated: “Lenders are aware they need to be flexible with their customers and are already ahead of the game – certainly more than the chancellor might have us believe. With around six in 10 mortgage products coming with a potential payment holiday written into the terms and conditions, cash-strapped home owners can at least enquire about taking a break.”
He also stated: “Taking a payment holiday will need to be agreed with your lender and just because there’s a facility for it doesn’t mean your bank will let you off repayments easily. In fact while lenders are struggling your argument will need to be watertight – but banks would rather know you’re under the cosh now and intend to do something than wait until you’re defaulting because you can’t afford the repayments.”
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