Arrangement to pay interest only on repayment mortgage

Costus

Hi there,

First time posting asking for mortgage advice.

I have been a forum user in the past but mainly for bankruptcy reasons several years ago. Where in turn I helped others with my own advice and experiences. We came through the other side, cleared ourselves and managed to get a help to buy mortgage with Nationwide.

The question I have is regarding a situation that we have found ourselves in. My OH has been off work and only getting SSP since February 2019, up to now we have been treading water and paying our mortgage in full every month with savings. But it has now got to the point where all our savings have gone and this forthcoming month we will be struggling to pay our mortgage in full. My OH is due to have surgery in September and recovery time after this is 12 weeks,
so she won't be back to work until December 2019.

We contacted Nationwide and explained our situation, they were very helpful and said that we could just pay back the interest only until my OH is back to work full time, then revert back to our regular repayment mortgage. (Capital and interest)

Will doing this short term switch to only paying interest affect our credit rating?

If so, I am tempted to get a 0% credit card and use this to pay off our mortgage in the short term and then tackle that debt when our income goes back to its usual level when my OH goes back to work.

Apologies for the long post and thanks for reading it.

Kentish_Dave

You need to ask the bank whether they will report this to the credit agencies as a negative event.

BoGoF

As above, only the lender can tell you how they will report it.

Re the credit card to pay the mortgage - will your lender accept a credit card to pay the mortgage? Unless you mean a money transfer card?

ACG

It will show up negatively on your credit report yes.

AnotherJoe

Costus wrote: »

Will doing this short term switch to only paying interest affect our credit rating?

If so, I am tempted to get a 0% credit card and use this to pay off our mortgage in the short term and then tackle that debt when our income goes back to its usual level when my OH goes back to work.

Why would you care? Are you planning to borrow more money? I'd have thought that borrowing money on a 0% card would also affect your credit rating, and it may put you in a bad position later on if you cannot pay it all off before the 0% period expires and you cannot roll it over. Then you'll have a 20% debt to service instead of 2%.

sal_III

When I was taking on my mortgage with Nationwide I recall reading either in the T&C or internet comments that such mortgage "holiday" is reflected on your credit file. But it will most likely be better than spiral down by borrowing from peter to pay paul

Can you even get 0% CC with your checkered past? Even if you can, you can't just use it to pay the mortgage as Nationwide won't accept CC. You can probably put some of your other spending on a CC, but thread carefully. By the sound of your post you have experience with managing debt so I'm not going to lecture you on the potential pitfalls.

Costus

Thanks for all your help and advice. I’ve been lucky enough to get a second job, that will allow me to continue paying my mortgage until my OH is fit and well.

Costus

sal_III wrote: »

Can you even get 0% CC with your checkered past?

I have had several 0% credit cards since being discharged from bankruptcy several years ago. I never pay interest or fees, so basically a free credit line.

Bankruptcy isn’t an endless checkered past. Once it’s off your credit file it is hardly ever asked in credit applications.

The reason I asked this question is because as it stands I have the highest credit rating possible according to Experian and Equifax, a position that I worked hard to get. When my fixed mortgage rate comes to an end in 2.5 years time, I didn't want a minor blip as paying interest only to affect us getting the best deal possible.

Appreciate your input, thank you.

BoGoF

You do know those credit reference agency scores/ratings are a gimmick.....and no lender ever sees them.

[Deleted User]

Costus wrote: »

The reason I asked this question is because as it stands I have the highest credit rating possible according to Experian and Equifax

That's normally the case with bankrupts.