It’s a worrying time and whilst health is the primary concern financial issues are also important. Many people are worried about paying their bills, to help we have put together a series of hints and tips.
PART 1 – MORTGAGE AND RENT
HELP WITH MORTGAGE
Mortgage Payment Holiday
If keeping up with your bills may be a challenge, speak to your bank. The Chancellor has agreed that they will should show tolerance and offer help to mortgagees. This means they all should offer a three-month payment ‘holiday’, allowing customers a temporary break from having to make mortgage payments. This would typically mean for three months you would not pay anything, and then when your mortgage repayments resume, the total you owe would be spread over the remaining period of the mortgage meaning you will see an increase in future payments. You will still be charged interest but it will be added to the total cost.
Warning – mortgage holidays MUST be agreed with your lender
To take a mortgage holiday, DO NOT just stop your direct debit or standing order. Any mortgage holiday MUST be agreed with your lender first. This means you need to contact your lender and make a formal agreement as to how long you wish your ‘holiday’ to last. If you do stop your payments without agreement this will be recorded as a late payment, which will not only put you into arrears but will also likely affect your credit file. You must keep paying until you can agree the holiday.
HELP WITH RENT
If you’ll struggle to pay rent during the coronavirus outbreak you should speak to your landlord as soon as possible to let them know your situation and work out a repayment plan. Government guidance is “encouraging tenants and landlords to work together to put in place a rent payment scheme” , however landlords are interpreting this guidance in different ways, and whilst some landlords are working out new repayment arrangements others are not offering to make any adjustments.
You should also check that you are receiving all the financial help you are entitled to. The Government announced an increase in the housing allowance part of universal credit. See Money Saving Expert’s guide Employment & benefits coronavirus guide for more information.
In England and Wales the Government has introduced emergency legislation which will mean landlords will need to give three months’ notice before starting eviction proceedings. The Government has also said that existing processes that exist for social landlords (Councils and Housing Associations) dealing with rent arrears will be extended to include private landlords too. It will ask landlords to allow tenants to stay in their homes wherever possible. Local government and housing associations have already said that no social renter should be evicted due to coronavirus.
If you are the tenant of a council or housing association visit their website where most have information on how they can help people who are suffering financial hardship.
Private landlords are also now eligible for a three-month buy-to-let mortgage payment holiday if their tenants are experiencing financial difficulties. They do not have to pass this on to their tenants but most will and you should talk to your landlord about this option.
COMING SOON PART 2 – CREDIT CARDS, LOANS, OVERDRAFTS and SAVINGS
