Payment Break

sade78

I'm currently on maternity leave and have decided to take a 6 month break from the mortage,I understand that they continue to charge the interest abd we will need to pay extra when we go back to it, What im worried about is will this affect our credit score or if we decided to change mortage to buy new house will it affect it

GMS

If the payment break is pre agreed by the lender then it should not be reported any missed payments.

Your credit file should show all contractual payments having been made, as in effect they would have been due to the break allowing no payments.

Speak to your lender and clarify this before taking a break.

sade78

It is agreed by my lender but they mentioned it being showing as a negative debt, So of course that made me panic and think am i doing the right thing.

Is it benefically to do these payment breaks or does it make it worse for you

beecher2

sade78 wrote: »

Is it benefically to do these payment breaks or does it make it worse for you

Authorised arrears should be taken as a very last resort - best to cut back elsewhere if at all possible. Debt Free Wannabee forums can help you do so.

dunstonh

Authorised arrears wont appear on your credit file but they will appear on your mortgage statement. If you plan to move lenders in the near future then it could work against you if the new lender sees you have not been making any payments. They may have a different view on authorised arrears as people only typically ask for them when they are short of money.