Mortgage - Maternity break query

DebtMagnet

Hi all,

quick question to those in the know. I phoned NRAM to ask if we could extend our interest only period for 5 months to account for the 5 month period my wife will be on statutory maternity pay. They said someone would phone me back.

They just called me back today and suggested taking a 5 month maternity break instead which is something I didn't even know was an option. Anyway we would still struggle to pay just the interest only so it seems a better option to take the break and divert any spare money to clearing some other debts. I agreed in principle over the phone and simply need to confirm it in writing and send a copy of the birth certificate.

Having just read various threads on here I can see people calling maternity breaks 'authorised arrears'. So if this is the case, will my credit file show that we are in arrears on the mortgage even though it has been agreed (and suggested) by NRAM?

Thanks in advance
DM

Thrugelmir

DebtMagnet wrote: »

Having just read various threads on here I can see people calling maternity breaks 'authorised arrears'. So if this is the case, will my credit file show that we are in arrears on the mortgage even though it has been agreed (and suggested) by NRAM?

Arrears are arrears however you dress them up. So NRAM will flag up to other financial institutions that you are financially struggling. The fact that they are suggesting the option merely shows their flexibility. Its your choice whether to accept the offer or not. As the arrears will need to be paid off. Deferment merely pushes the problem down the road.

Wh05apk

I think you need to clarify what they are offering you here, some lenders if you have been with them a while will allow you a break, effectively just taking back the capital you have repaid, and that will be fine, if they allow you effectively to go into arrears for 5 months, then that will be disasterous for your credit.

xyellowx

becareful when i enquired about a 6 month mortgage break with rbs there was a one off fee of around £300, still had to pay monthly interest, and it would of got flagged up on credit report
no thankyou was my reply

DebtMagnet

Thanks for the above replies. This is what I was worried about as it all seems a bit too easy and totally unexpected.

After struggling for the past 6 or so months to pay slightly over minimum payments on credit cards and being uber careful not to spend on the credit cards in the hope of trying to improve our rating, the last thing I want is to agree to destroy our credit rating on a whim.

I guess I need to ask them what they will do then as 6 months arrears sounds horrific to me and obviously will to other lenders.

I'll see what they say.

Thrugelmir

DebtMagnet wrote: »

Thanks for the above replies. This is what I was worried about as it all seems a bit too easy and totally unexpected.

After struggling for the past 6 or so months to pay slightly over minimum payments on credit cards and being uber careful not to spend on the credit cards in the hope of trying to improve our rating, the last thing I want is to agree to destroy our credit rating on a whim.

I guess I need to ask them what they will do then as 6 months arrears sounds horrific to me and obviously will to other lenders.

I'll see what they say.

Pay a visit to the Debt Free Wannabe board for support and advice.

DebtMagnet

Thrugelmir wrote: »

Pay a visit to the Debt Free Wannabe board for support and advice.

Thanks Thrugelmir

Cheers
DM

xyellowx

op- thrugelmir advice spot on i started looking at debt free board a while back when we seemed to always have more money going out than coming in regardless of what we had earnt that month

they call it a light bulb moment, it wasnt a mortgage holiday i needed it was a drastic change in our lifestyles so byebye went the top of range toureg and new towing caravan, it was that kind of behavour that was getting us in a mess.

tip- dont take the feedback to heart of there they just soon point out some home truths

DebtMagnet

Just to update on this thread in case anyone else is looking in future, having finally got round to speak to NRAM this week they have assured me that nothing gets recorded on your credit file as it is an agreed payment holiday. I asked specifically that if I request my credit file would I see anything different from now and I was told no.

So unless they are lying then it seems ok if needed?

xyellowx wrote: »

they call it a light bulb moment, it wasnt a mortgage holiday i needed it was a drastic change in our lifestyles so byebye went the top of range toureg and new towing caravan, it was that kind of behavour that was getting us in a mess.

Thanks xyellowx, the only problem with that is that we have been on a gradual reduction of anything we consider a luxury for the past few years to simply survive so there is not a lot left to cut back on!!

Thanks anyway though
DM