Mortgage: Expert calls on worried homeowners to contact their lenders or seek better rates
Mortgages are a key priority for many people across the UK. As the coronavirus pandemic continues, there are fears that incomes will suffer. People are worried about losing their jobs and policies have been put in place to help with this but some experts are providing additional advice for homeowners.
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Rishi Sunak has commited to doing “whatever it takes” to support people.
With this in mind, he made specific commitments to mortgage holders.
As he recently detailed: “Following discussions with industry today, I can announce that for those in difficulty due to coronavirus, mortgage lenders will offer at least a three month mortgage holiday – so that people will not have to pay a penny towards their mortgage while they get back on their feet.”
This was welcomed by many but some may still worry about their financial commitments.
Gemma Harle, the Managing Director at Quilter Financial Planning, provided suggestions for worried mortgage holders:
“If you have financial worries and find yourself concerned about your ability to meet your existing mortgage payments, for example if you are out of work, then be sure to contact your lender to discuss your options”
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“The tighter affordability rules in place today should ensure that fewer people find themselves in a position where they struggle to keep up on their mortgage repayments, but if you are having difficulty don’t bury your head in the sand.
“If you default on a mortgage repayment it could count against you in a future borrowing application, and of course there is the risk of repossession in extreme scenarios.
“So be sure to speak to someone rather than just letting the situation drift.”
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The recent changes in interest rates could also provide people with options for their mortgages.
Earlier today, the Bank of England lowered the base rate to 0.1 percent, the lowest it has ever been.
This low interest rate environment could be good for mortgage payers but analysis reveals that many fail to take advantage of their options.
As Gemma continued: “Recent data from the FCA shows that far too many people fail to shop around for the best mortgage rate at the end of their term.
“It shows customers that obtained their mortgage through an adviser are more likely to remortgage at the end of their term, whereas ‘DIY’ borrowers are more likely to stay with their existing lender and move onto the variable rate.
“They could be missing out on the chance to fix their mortgage at a more competitive rate.”
On top of mortgage holders, the government has committed to support renters in the UK too. The government is regularly updating the advice they have on their website as coronavirus moves forward but there are other sources people can turn to for support.
There are impartial organisations who provide advice on mortgages and other financial commitments. These organisations can include the Money Advice Service and Citizens Advice.
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