Virgin Mortgage Corona Virus Advice

SonicDad777

As a freelancer it's clearly going to be a tough 6-12 months ahead. We have a £200K mortgage on a £490K property with repayments at £890 a month. The fixed 1.75% deal ends in October 2022. We were wondering about speaking to them to switch to Interest only for say, 6-12 months to ease the burden but don't want to give them ammunition with which to penalise us.... any thoughts kind people?

[Deleted User]

They won't penalise you.  What sort of penalty did you have in mind?

They're the only ones who can tell you if they'll allow interest only.  They'll want to know your plans for repaying the capital though, so make sure you have a plan.

SonicDad777

Thanks for the speedy reply zx81. We would revert to a repayment mortgage once the global crisis has passed in order to pay it off. When I say penalised I mean the threat of measures (bad credit file notes, poor interest offers etc) if we are too open about potential difficulties ahead. 

[Deleted User]

You'll still need to make up the gap for the time you were on interest only.  That could mean extending the term, or making a lump sum payment of the missed capital.

They'll want more than a vague 'we'll sort it out sometime in the future' so you just need to be prepared, although they're likely to be more lenient now than at other times.

SonicDad777

Yes that sounds like good advice. So we could extend the mortgage by another year for example? I'm also hoping there may even be better deals out there in a couple of year's time than the 1.75% we're currently on, though this is a pretty good rate tbf!

foxy-stoat

If you expect to have a drop in income equal to the cost of the capital repayment element then it may well be worth a phone call.

If your drop in income is equal or more than your mortgage payment then moving to interest only wont help you, your more likely need a payment holiday without penalty.

Certainly worth a phone call either way though.

SonicDad777

Anyone know how to get through quickly to Virgin Mortgages I've been on hold for ages.

[Deleted User]

It's just going to be a matter of waiting.  You could try social media while you're waiting, but I would expect phone to be fastest.

SonicDad777

Thanks, will keep trying.

amnblog

Barclays have said today they they will do this.
Not heard the same from VM as yet.
I would expect that given the green light by the Regulator most Lenders would see this as useful for them (as it increases profit), and their borrowers (as it reduces cash flow out).

SonicDad777

amnblog said:

Barclays have said today they they will do this.
Not heard the same from VM as yet.
I would expect that given the green light by the Regulator most Lenders would see this as useful for them (as it increases profit), and their borrowers (as it reduces cash flow out).

Thanks are you referring to the 3 month mortgage holiday or the idea of going interest only for 12 months?