The lockdown has been financial tough for many families, not least for those who were placed on furlough or, worse still, were made redundant. Losing your income or having it reduced makes it hard to get through the month at the best of times but during a pandemic when you can’t even leave your home to look for work, makes file extremely difficult indeed.
In an effort to help those who are experiencing financial hardship during this time, the UK Government reached agreement with mortgage lenders to allow their borrowers to take a mortgage payment holiday for a period of time.
Initially, lenders were accepting applications for a mortgage payment holiday of up to three months up until the end of June. However, during the course of June, this was extended and those who are struggling to pay their mortgage now have until 31 October to make an application.
We would stress that your payments don’t “magically disappear” and you’ll still have to repay the money you would have normally paid during the mortgage payment holiday period. In these circumstances, your lender will discuss an adjustment to your regular monthly payments once the mortgage payment holiday has ended or agree with you that the mortgage be extended for a period so you can continue to pay the amount due that built up during the mortgage payment holiday.
We can also report that repossession of residential properties has been suspended until 31 October so if you do find yourself in the unenviable position of being unable to pay your mortgage at all during this time, your home cannot be repossessed before 31 October.
Whilst these measures are likely to help some, they won’t help everyone.
We would advise those who find themselves with a mortgage and in financial difficulty to speak to their lenders to explore ways in which some sort of agreement can be reached to allow you to remain in your home and to adjust the repayments to a level you may be able to meet.
If all else fails, if you do need to sell, we would recommend that you do so yourself rather than have your lender repossess your home and sell it to recover their debt. You’ll always secure a far better sale price than the lender will under a repossession sale - and that just might extinguish or reduce any residual debt due to the lender once your house is sold.
If you find yourself in this position and need some legal advice, please get in touch with us without delay.
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