Many homeowners are worried about how the coronavirus crisis will impact their ability to pay their bills. Get advice if you are worried about paying your mortgage or rates.
Paying your mortgage
Keep paying your mortgage if you can afford to, especially if you have a repayment arrangement with your lender or have been to court about repossession.
You can ask your lender for a mortgage holiday, or deferral if you are struggling to pay your mortgage because of COVID-19. The government has announced that lenders will offer a mortgage holiday, allowing borrowers to stop payments for up to six months. This break in payments will not affect your credit history.
Every lender will have its own policies and eligibility criteria, but lenders should by sympathetic and helpful to people affected by a drop in income because of the coronavirus crisis.
Get advice if your lender has refused your request for a payment holiday.
How does a mortgage deferral work?
You have to to ask for a payment holiday, also known as a payment deferral by 31 March 2021. When you request a mortgage holiday, you get a break from paying your mortgage for a fixed period of time. Your lender might reduce your monthly payments or agree that you can stop these entirely.
You can get payment deferrals for up to six months in total. But, your lender can only approve a deferral for a maximum of 3 months at a time. At the end of your first deferral, your lender can extend this if you still need help.
Interest will still be added to your loan during this time and this interest will be added to your future payments. To collect the missed payments, your lender will either
- extend your mortgage term by the number of months you had as a holiday or
- slightly increase your monthly payments after the holiday for the remainder of the mortgage
Each lender has different policies and procedures in place for approving and managing mortgage holidays. Mortgage holidays taken as a result of coronavirus should not affect your credit rating, but make sure to confirm this with your lender
Benefits to help with mortgage payments
If you are already claiming certain benefits, you may be able to get Support for Mortgage Interest. This is a payment that government makes to help you with the interest charge on your mortgage. It isn’t a benefit. Instead, it is a loan and you will have to pay it back when you sell your home.
If you have just started claiming Universal Credit, you need to wait 9 months before you can get this help with your mortgage.
The government hasn’t announced any changes to benefits that will give extra help to pay mortgages.
Benefits to help with rates
You can apply for a rates rebate if you are getting Universal Credit. Your payment can be backdated for three months or until you became entitled to Universal Credit if you've been getting the benefit for less than three months.
Can you claim benefits to help?
You may be able to get benefits to help with your living costs if your income has reduced. Speak to advisers at Make the Call to find out which benefits you can apply for and how to make the application.
You claim Universal Credit online. When you claim, you can ask for an advance payment and you should also apply for a payment from the Universal Credit contingency fund. The advance must be paid back, but you don’t have to pay back the contingency fund payment.
Falling behind on mortgage payments
Get advice if you’re worried about falling behind on your payments.
Contact Housing Rights urgently if
- you get a letter from your lender that says your debt is being dealt with by their legal team, or
- you get a letter from the courts saying that your case has been reactivated, or
- you get a letter from the courts saying that your lender has started a legal case against you.
Talk to your lender if you’re having financial difficulties. Keep a record of all communication with the lender. This will be important if the matter does end up in court as you can show the court that you tried to work with the lender and kept them updated.
Missing a payment when a court order is in place
Contact your lender if you have a payment arrangement or suspended possession order in place and you are going to miss a payment. Keep a record of any communication you have had with the lender about your situation. If contact was made by telephone, ask if the call will be recorded and take a note of the time and date the call was made.
What happens to court cases about mortgages and repossession?
At the start of the pandemic all existing court cases for mortgage arrears were adjourned generally. The lender must ask permission from the courts to reactivate a case that was adjourned. The lender must also send you a copy of the notice asking to reactivate the case. Get advice if you think that your lender wants to take your case back to court.
Mortgage cases will not be suspended forever. You should pay as much as you can afford towards your mortgage each month. Make sure your lender knows about any difficulties you are having as a result of coronavirus.
Buying or selling a home
The Department for Communities has published guidance to support the reopening of the property market. If you are selling your home or trying to find a home to buy, you should read this guidance, It explains the steps that sellers, buyers and their agents should take to minimise the spread of the virus and ensure that the moving process happens as safely as possible.
Make sure you check the Public Health Agency website for up to date information and advice on the virus and what to do if you think you may have it.
Read the advice on how to keep your distance from others if you have any symptoms or think you may have the virus. Remember to stay at least 2 metres (3 steps) away from other people and to wash your hands thoroughly and regularly.