In a bid to avoid cliff-edge financial issues, the Government have extended the Mortgage Payment Holiday scheme for a further three months; a financial lifeline for many amidst reduced work and redundancy. However, as Managing Director Steve Olejnik explains, the number of those wrongly taking advantage of this emergency offering is beginning to have repercussions.
Despite warnings that taking a mortgage payment holiday will, in the long term, cost you more as you’ll accrue extra interest, many landlords have continued to use them as an opportunity to boost cash flow for future investments.
However, lenders have got wise to this, and already two leading specialist buy to let mortgage lenders have adjusted their criteria in response. One has launched products which are unavailable to anyone who’s taken a mortgage payment holiday, and the other has increased affordability stress tests for Ltd Company mortgages. Obviously, this also punishes those that genuinely needed to pause their mortgage payments to maintain financial stability and our concern is that the more who misuse the emergency scheme, the more repercussions and restrictions we will see in the buy to let mortgage market.
If you are in financial difficulty due to the Coronavirus pandemic, we suggest you speak to a broker about what options there are for you in order to ease your financial stress. Depending on your situation, a mortgage payment holiday may not be the only option available to you; you can read about what else you can do here.
As always, you can speak to any of our expert consultants who will be able to advise on your next steps. Call them on 0345 345 6788 or email firstname.lastname@example.org.
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