Like many other property professionals, in recent weeks I have been backing the government’s new scheme which will see homeowners and landlords able to apply for a three-month mortgage holiday to get them through the coronavirus crisis.
It’s a simple fact that the far-reaching provisions set out by the government will help those whose livelihoods have been affected by the shutdown of various businesses.
The offer is perfect for many and is available to homeowners who had been up to date with payments before the crisis took hold at the end of March. Landlords can also claim but they are expected to pass the savings onto their tenants who are struggling to make rental payments.
However, it’s very clear that too many people still think the widely-publicised mortgage holiday won’t affect them in the long-term. They are failing to read the small print as essentially taking the mortgage holiday option will mean mortgage terms being extended – meaning it will take bit longer to pay off the mortgage. I just want people to be clear about that and have no nasty surprises down the line.
Another myth I’d like to address is that homeowners and landlords must have tested positive for Covid-19 to qualify for the holiday period. That is completely inaccurate as any homeowner affected by the government-opposed lock down can apply. Ultimately, it is available to those concerned about their ability to make payments, such as people who have lost work and salary.
To sum up this short blog, we should all welcome the government’s move. It’s all about helping people through the crisis and thousands of people have already signed up. All I ask is that before you do, read and be aware of the financial small print and the consequences it may have at the end of your mortgage term.
Javed Ahmed is an Associate within our Residential Conveyancing department. For further advice, readers can email email@example.com.