If you take a payment holiday does it go on your credit score.

SAMMYE_2

Hi all,

I am currently remortgaging at the moment and trying to scrape together a little extra cash as dont want to miss out on a good deal for the sake of a grand or two...

Just wondering if I took a mortgage holiday.. I think I am allowed something like one month a year whether it will affect my credit rating?

Does anyone know?

Cheers

holly_hobby

The lender will have to record the "missing" month, but should put a notice on stating that the month's arrears were by prior arrangement and mutual agreement with the lender.

It shouldn't affect any lender ref - as they should include an appendum explaining the 1 mths arrears are in relation to a mge holiday arrangement.

Hope this helps

Holly

Thrugelmir

Remortgaging will be better if the balance you owe is lower. Improving your LTV. So why do wish to take a payment holidays?

robbo231079

I am a senior account manager at a leasing company and regularly see searches. I have come across instances where a payment holiday appears as a missed mortgage payment, which has caused us issues in obtaing credit for our client.

Searches show a series of twelve 0's, if all payments have been made on time, with the number on the far left being most recent.

A clear payment history would look like this.

Mortgage 000000000000

If somebody missed a payment 4 months ago but then immediately paid it the next month along with their next scheduled payment it would look like this.

Mortgage 000100000000

If somebody missed a payment 4 months ago but then didn't make it up for three months, whilst paying their scheduled payments, it would look like this.

Mortgage 011100000000

The last example is how I have seen mortgage payment holidays look, but with the 1's carrying on endlessly until they cover the full 12 units (if it was a year ago or more).

I don't want to put down the previous poster, but I can honestly say that in all of my 7 years in the industry, I have never seen a comment made on a client credit file. I'm not sure they would be allowed to put a comment on. I have seen a client's own notice of correction several times, but they can do that as its their own file.

I'm not saying that banks always record the payment holiday data this way, just that some slip through the net. You would need to contact your lender and ask them to contact the credit agency and ask them to change the data they had provided, as the holiday period had been agreed.

Senior_Paper_Monitor

All the posters above are, at least to some extent, correct - it varies dramatically by lender (and to a lesser extent by the nature of the arrangement within the individual lender).

A common (Experian - others use different indicators) indicator is 'U' which interpretes "the lender cannot give the account status code for this month".

The interpretation/reaction to such arrangements can also vary between lenders (i.e some will react badly even to the 'U' indicator on the report).

So rule 1 - is to avoid mortgage holidays if possible.

Rule 2 is to ensure how the current lender will report to the specific arrangement - do this in writing !!! (Flossie on the desk that the OP is likely to get to really hasn't got a clue when she blythly says "no it will be allright").



In the circumstances that the OP describes I don't see the benefit of the proposed use of the permitted holidays - Thrugelmir is absolutely correct - reducing the borrowing has exactly the same benefit as extra savings and is probably more productive in terms of interest paid/received etc.

Thrugelmir

robbo231079 wrote: »

I'm not saying that banks always record the payment holiday data this way, just that some slip through the net. You would need to contact your lender and ask them to contact the credit agency and ask them to change the data they had provided, as the holiday period had been agreed.

The fact that the arrangement is agreed has no relevance. The purpose of a credit rating is to warn others of events that may impact their decision to lend. The credit rating is not the property of the individual. So rectifications are only made where the data is erroneous or factually incorrect.

SAMMYE_2

Cheers guys very useful.. I only wanted to do it as most of the money is going to interest at the moment so just thought it would give me extra cash to make sure I get the best deal ( I am teetering on the 75% mark depending on what my property is valued at.

I think I will take your advice and steer clear of a mortgage holiday. Thank you all very much for your help. Very much appreciated. :-)

Thrugelmir

SAMMYE wrote: »

Cheers guys very useful.. I only wanted to do it as most of the money is going to interest at the moment

Then you should be aware that after paying 20 years of a 25 year repayment mortgage. You will still owe 40% of the original capital balance.

A mortgage is for life not just for Xmas.