Mortgage holidays and home repossessions ban extended until end of October

HOMEOWNERS now have until the end of October to apply for a mortgage holiday if they’re struggling due to the coronavirus crisis.

The Financial Conduct Authority has also extended a ban on home repossessions for another four months, so owners can self-isolate according to Government policy if they’re ill without fear of losing their property.

Homeowners have until the end of October to apply for a mortgage payment break if they’re struggling due to coronavirus

Households whose finances have been hit hard by the COVID-19 lockdown can apply for a payment break on their mortgage of up to three months.

Some 1.7million payment freezes have been granted so far, according to banking trade body UK Finance – accounting for around one in seven UK mortgages.

Applications for the payment freezes were due to come to an end in June but now homeowners who haven’t already asked for one have until October 31.

The missed cash will need to be repaid by either adding it onto your remaining payments or the end of your mortgage term – but homeowners have been warned that it could end up costing them £2,769 in higher repayments.

The watchdog is urging borrowers to continue making the payments if they’re able to do so.

The FCA also says that banks must offer borrowers further support if they are still in financial difficulty after the payment break, including a further three month freeze on repayments.

Normally, taking a payment holiday would negatively impact your credit score and affect any future borrowing but freezes taken due to the coronavirus pandemic won’t.

But the watchdog warns that lenders may still be able to see that you’ve taken a break on payments through other sources, such as your bank account information.

The guidance comes into effect from June 4 and only applies to mortgages -an extension to payment holidays for credit cards, personal loans or car finance deals has not been granted.

More to follow…

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