question re-payment holidays & future applications..

leedb

hi all

we recently had our first baby, and are looking at taking a payment holiday to enable my wife to stretch out maternity leave as long as possible. We have been told by our provider (Halifax) that this is no problem and that we are able to do so. The terms of our deal allow us to take up to 6 months payment holiday at any time (we're only looking at taking 3).

My question is, will this have any negative impact when applying for future mortgages - i.e. is it likely to viewed in a negative light by other providers, even though it is written in the terms of our current deal.

We are likely to look to move house in 12-18 months time.

Any help/advice appreciated.

Thanks

Ilian2008

Hello. I took a payment holiday a couple of years ago when my wife was having chemo and couldnt work. Its great to have the breather but it does get added onto the mortgage amount and you pay interest on that. I had a 143k mortgage, interest only and when i went to remortgage the sum owing was higher than i had thought but i dont think it went against me credit wise at all.

best of luck

luckyfool

IT's difficult to say with any certainty. The payment holiday (if part of your contract and agreed to by the lender) will not show as arrears on your credit file, however it will probably show up as a payment holiday or similar so other lenders can take it into account. i.e. It might reduce your credit score if they feel it makes you a higher risk. If you were applying 18 months from the start of the holiday (12 months from the end) then your report would show 12 months clear monthly payments since the end of the holiday and in those circumstances I would guess that it would have a minimal impact one way or the other. An other option might be to request interest only for the 6 months if Halifax will allow you to switch. That would definitely not impact on your credit file, though you should be careful to switch back onto repayment after the 6 month period. Another benefit is that you would avoid increasing your outstanding balance on the mortgage as any missed payments would be capitalised and you would be paying interest on the missed interest.

_Andy_

leedb wrote: »

hi all



My question is, will this have any negative impact when applying for future mortgages - i.e. is it likely to viewed in a negative light by other providers, even though it is written in the terms of our current deal.

You need to ring your lender and confirm how they record it on your credit file. If it goes down as a made payment ('0') then it won't impact things. If it's recorded as a missed ('1' upwards) it will cause problems, if it goes as an arrangement ('I') then potential problems.
Ring the lender to clarify then you'll know for sure.

leedb

thanks _andy_ - that's useful, I'll check with them.

I know about the interest being added on - my wife will receive a return to work bonus, and we'll pay off any extra interest then, so we won't lose out on that.

thanks all

_Andy_

leedb wrote: »

thanks _andy_ - that's useful, I'll check with them.

I know about the interest being added on - my wife will receive a return to work bonus, and we'll pay off any extra interest then, so we won't lose out on that.

thanks all

You're welcome. Out of interest can you post what you find out, thanks.

leedb

ok, question answered.

halifax mark it as a payment, therefore no worries there. Called both nationwide and abbey, to ask whether they would view it as a negative from an applicant. Nationwide said not a problem, because it's agreed, and also they allow customers to take payment holidays. Abbey wouldn't have a problem.

hopefully helped others as well as myself there...