Should we take a payment holiday?

foxy17371

Hi, I'm a newbie, well been lurking for years but never seemed to be able to post for some reason so I've set up a new profile and seems to be working.

We bought our house 2 1/2 years ago and have £140k mortgage fixed for 5 years with Nationwide. The repayments are approx £960 per month. The property is worth around 280k. We have run out of money to finish jobs that need doing on the house-replacing conservatory roof, fencing, carpets, flooring etc. We don't want to save to get these things done as would take years as we have little/nothing left at the end of the month.

Would taking a payment holiday for 6 months be a reasonable option for us to get the house finished? I think we can take a payment holiday for up to a year with Nationwide, but would need to look into whether would have a negative effect on our credit rating. The other option I thought of was going interest-only but this would only give us an extra £350 per month so would still be saving for a long time to get all these jobs done. We realise both these options would increase the cost of the mortgage over time but we want to enjoy our house now!

Any advice greatly appreciated

dunstonh

Would taking a payment holiday for 6 months be a reasonable option for us to get the house finished?

Don't know. You tell us. We dont know what you bills are going to be do it.

I think we can take a payment holiday for up to a year with Nationwide

you shouldnt think of it as a holiday but as authorised arrears. You are rolling the interest on to the mortgage and its compounded. So, when you restart payments they will be higher.

Plus, with interest rates at an all time low, if you cant afford to do things now, what are you going to do when they nearly double to bring them back closer to the long term average?

The other option I thought of was going interest-only

Nationwide probably wouldnt allow that anyway.

we want to enjoy our house now!

Everyone wants things now. However, some people can afford to borrow, others cant. Some people will wait until they can afford it, others wont. If you can afford it and understand the consequences then fair enough.

getmore4less

If you have little left at the end of the month now how are you going to pay the increased cost of the mortgage at the end of the authorised arrears?

Cannon_Fodder

Not sure if Nationwide do, but many lenders will mark your credit history as arrears for a payment holiday.

If you do not have anything spare each month then borrowing more - which is the effect of having a payment holiday - doesn't seem a great option. When you come to re-mortgage, even if the rate stays the same, the total outstanding will have increased and you may soon fall into arrears on the house - not worth risking a repossession for the sake of fencing...surely?

Other loans, a re-mortgage, credit cards etc, could provide funds, but it still comes back to the same problem of how to pay it back, if you have no spare funds each month.

Do you have any emergency savings? If not, what happens if your income falls for any reason?

Think you need to have a serious, honest appraisal of your expenditure.

ItMightBeUsefulOneDay

Please don't think of is as a payment "holiday". It's going into arrears on your mortgage which from the sounds of your finances could come back to haunt you later. Unless the roof is falling in or there's a hole in the floor of the main bedroom then none of these jobs "need" to be done now. You'd like it, yes, but they're not essential right now. Save these emergency measures (such as payment holidays) for real emergencies.

Go over to the debt free-wannabe or mortgage free-wannabe forums and post up a list of your income and expenditure. Curb your spending back so you have more spare cash and can therefore work your way along the list of jobs that need doing. It will take longer but you'll be paying out a whole lot less money in the longer term.

Peelerfart

Picking up on the above and all good sound advice.

I would add post your Statement Of Affairs on the Debt Free Wannabee forum.Those guys are very non judgemental.

There aren't many people, in my experience,who get the house exactly the way they want it straightaway (if ever!)