Martin Lewis: Mortgage holders urged to wait as help is “99% likely” to arrive next week

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Martin Lewis, 48, was questioned on mortgage options today just as new payment holiday rules come into play. The continuing coronavirus problem has forced the government to make swift changes and this can understandably leave savers confused with where they stand.

John wrote in to detail his unfortunate situation and ask Martin for advice.

John detailed he was at the end of his mortgage payment holiday and is claiming Universal Credit having lost his job.

Despite his efforts, he was unable to land another job and he went on to ask Martin if he has any other mortgage options for his situation.

Fortunately, Martin reiterated that mortgage payment holiday rules have changed for the better and while he is planning on covering this in detail tonight, he provided a brief overview of the changes: “In a nutshell, you’re allowed up to six months automatically, but that’s not to come in yet, it’ll probably come in next week.

“So it ended last week and it’s going to restart next week so now, in some cases, is not the time to call [a bank].”

The FCA recently set out guidance on how banks and other lenders should manage and assist customers stuck with mortgage payment problems an Martin went on to break down the support on offer: “There should be tailored help from your bank, they shouldn’t be repossessing you if you’re a financial victim of the COVID situation.

“They should be give you tailored personal help that probably will affect your credit file, but get the help anyway.

“It will not necessarily be a payment holiday, but you need to talk to your lender.”

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Some mortgage holders may not be able to wait for additional changes but for the ones that can, Martin went on to urge them to hold out for a little while longer.

He concluded: “I’d probably wait if you can, until next week when these formal changes which are 99 percent likely to come in, have come in.”

On November 2, the FCA announced further proposals to support mortgage borrowers impacted by coronavirus.

The regulator proposed extending the availability of payment deferrals to support borrowers, with the following highlights being made:

  • those who have not yet had a payment deferral will be eligible for two payment deferrals of up to six months in total
  • those who currently have an initial payment deferral, will be eligible for another payment deferral of up to three months
  • those who have resumed repayments after an initial payment deferral will be eligible for another payment deferral of up to three months

Under the proposals, mortgage holders would have until January 31 2021 to request a payment deferral.

Additionally, it was proposed that no one should have their home repossessed without their agreement beyond the end of January.

Sheldon Mills, the interim Executive Director of Strategy and Competition at the FCA, commented on the announcement: “We are working with lenders to ensure enhanced support remains available to borrowers struggling financially following changes in the coronavirus situation across the UK.

“Tailored support will still be offered and remains the most appropriate option for many borrowers, but we are proposing to extend payment deferrals for additional support. We also want to make sure no one has their home repossessed during this time.

“It is in borrowers’ own long-term interest only to take a payment deferral when absolutely necessary.

“Those that are able to keep paying, should do so. This allows support to be targeted to those most in need.

“We are also asking borrowers not to contact their lender yet, and instead wait for further updates, including from their lenders, soon.”

The FCA requested comments and views on these proposals from the industry before final guidance would be published.

These views will be rounded up today and as Martin highlighted, further announcements should be forthcoming in the coming days.

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