mortgage break and switching

gazamanga

Hi.. we have overextended ourselves and are going to remortgage (current fixed rate is up) to raise a few more funds to clear credit cards (before cutting them up!!!!)..

Extremely short this month. We are currently with Northern Rock and I'm considering taking a mortgage break this month while we apply for the remortgage with another lender.

Question is.. will taking a mortgage break right now impact anything with transferring to another lender? Clearly not expecting to take the payment break with me.. it is purely for this one month while we get ourselves in order.

Thanks for reading!

Cannon_Fodder

DO NOT DO IT.

A payment break will appear as arrears, and prevent you re-mortgaging. For many months and probably years to come.

If the problem is small enough to be dealt with in 1 payment break, ask your bank for an overdraft facility - if it can be obtained cheaply.

Or switch to another current account that offers free or low overdraft costs, see Martin's Banking guides.

gazamanga

Wow.. thanks.. so even though its an agreed break it appears as arrears? This seems totally unfair..

Thanks so much for letting me know

Thrugelmir

gazamanga wrote: »

This seems totally unfair..

Why? The fact is you can't afford to meet your monthly committments. So are in arrears with your mortgage.

Lenders while in competition for business, have no desire to take on bad business. So suggest you don't look at remortgaging as a way out. Take a visit to the Money Saving Boards and learn to budget.

beecher2

gazamanga wrote: »

Wow.. thanks.. so even though its an agreed break it appears as arrears? This seems totally unfair..

Thanks so much for letting me know

Authorised or not, it is still arrears regardless of whether it is dressed up as a 'holiday' or 'break'. Go onto the Debt Free Wannabee forums for help - they're a great resource.

darich

According to Nationwide's website arrears is defined as "Any shortfall in payment that has not been agreed as a Payment holiday will be reflected in your Arrears Balance".
So if you take a payment holiday from Nationwide, they don't consider it arrears.

opinions4u

A payment break with Halifax is not treated as arrears. It is classed as full payment being made.

I believe RBS will record it as a missed payment on your credit file.

I don't know what Northern Rock would do - you would have to take the extraordinary step of asking your lender directly!

Regardless of this, I'm with Cannon Fodder. Don't do it.