Mortgage providers relax lending standards for the credit-impaired

Can you get a mortgage holiday because of coronavirus?

Homeowners and landlords could feel the impact of the coronavirus outbreak on their finances should they need to self-isolate, take unpaid leave or lose their jobs. They’re now being encouraged to talk honestly and openly with their lenders.

Most mortgage lenders have emergency measures in place for situations where borrowers cannot make their repayments. Now, some have brought in new options to help out worried customers. According to Martin Lewis, Money Saving Expert, the banks and financial firms are showing forbearance at the moment.

He said: “Many mortgage providers understand the situation. If you can’t work due to coronavirus, and that is causing you problems, the first thing would be to discuss it. Be honest and open, and hopefully they will make the terms easier, but it is case-by-case.”

Many of the major banks have already announced support measures for affected customers. This includes mortgage payment holidays, increased credit limits and penalty-free access to fixed savings. However, experts are urging borrowers to talk to their lender about their personal circumstances to find out what support is available.

Repayment holidays and dedicated support

  • TSB mortgage customers can apply for a two-month repayment holiday.
  • Natwest and RBS could offer customers a mortgage holiday of up to three months.
  • Lloyds, Bank of Scotland, Halifax and MBNA have all said that payment holidays will be available. Customers who need extra support will receive it, and fees will be waived for missed payments.
  • Virgin Money is offering payment holidays and debt restructuring.

However, borrowers shouldn’t assume that they will automatically get a mortgage holiday. Most lenders will assess customer needs on a case by case basis.

Dedicated support lines

  • Barclays has advised that customers experiencing problems should contact their specialist support team.
  • Santander has a dedicated coronavirus helpline – 0800 01 56 382 – for customers to explore their options.
  • Metro Bank customers can call 0345 080 8500 to discuss their needs.
  • Co-operative Bank customers can also call 03457 212 212 if they need advice.

Stephen Jones, head of UK Finance, said: “All providers are ready and able to offer support to their customers who are impacted directly or indirectly by Covid-19, which could include offering or increasing an overdraft or allowing repayment relief for loan or mortgage repayments: asking for help early is key.

“We would encourage customers who think they may be affected to contact their provider as soon as possible to discuss the support available to them.”

What about landlords and tenants?

The help should be there for most borrowers, but it doesn’t necessarily extend to buy-to-let mortgages. Again, landlords should contact their lender if they are having trouble meeting payments. They may be able to make similar arrangements.

But as a huge proportion of society now rents privately, the coronavirus outbreak is likely to affect rent payments, too. When a tenant can’t pay rent, the landlord is likely to bear the brunt.

The Residential Landlords Association (RLA) is asking landlords to be sympathetic to tenants in need. It believes landlords should let tenants off if they can, and let them catch up with payments later. This may not work for everyone, but it could pay off in the long run in some cases.

John Steward, RLA policy manager, said: “Whilst a minority of tenants may use the outbreak as an excuse to avoid paying rent, most will be genuine and suffering stress.

“If there hasn’t been a history of arrears or delayed payment, then it is better to accept the situation and work with the tenant to repay any arrears when things return to normal.”

As with any borrower, all landlords’ situations will be different. This is why lenders will offer advice on a case-by-case basis, and this includes for landlords. So anyone in need of a mortgage holiday or other help is urged to contact their lender as soon as possible.

As a business, BuyAssociation is taking the COVID-19 crisis seriously and taking all advised precautions for our staff, clients and partners. We will closely monitor the market and keep our readers and investors updated.

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