Mortgage holiday advice

roopstar26

This is for a friend whose husband has been put on SSP as he is off with depression. I advised my friend to contact her building society and ask for a mortgage holiday to at least give them some breathing space for a couple of months. They have refused and said that they need to fall into arrears which will go on their credit history as he may be off long term. Does this sound right? They have about a third of the value of their property in equity, have never missed a payment and have a mortgage that allows them up to three months payment holiday a year but in this instance the lender has refused. Can they do this? I was surprised to hear that they were not willing to at least help in the short term and their solution was no solution at all. Not surprisingly, my friend doesn't want a black mark on her credit. Can anyone help please?

Foxy-Stoat_3

Payment holidays will be detailed on the original credit agreement, does your friend have these they can look at?

kingstreet

Usually, payment holidays are reserved for those who have made overpayments, allowing them to underpay for a while as long as they don't fall behind where they should be, in terms of capital repayments.

Your friend is asking for a hardship alteration. A lender may consider a temporary alteration to interest-only in the first instance as a payment holiday where nothing is paid is a major concession, for serious hardship cases.

Yes, a payment holiday in these circumstances would often be recorded as arrears, even with lender approval.

They should not be prioritising unsecured debt payments over keeping a roof over their heads, if that's the plan.

roopstar26

Thanks for getting back so quickly guys. I have shown her this thread and to begin with, she's going to try the interest only route as at least that shows willing.

Thrugelmir

Default on other credit commitments before the mortgage.

Lenders will wish to see genuine hardship before taking action.