Commenting on the FCA proposals to support customers who are struggling to pay their mortgage due to coronavirus, Alastair Douglas, CEO of finance experts TotallyMoney, said: “TotallyMoney welcomes the extended support for those who might be in financial difficulty and are struggling to repay their mortgage as a result of coronavirus.
“Those worried about needing a payment holiday at a later date will be pleased to hear they can apply until 31st October. However, it’s important to understand that interest will still be added during a holiday, so choosing to reduce payments, rather than stop altogether, could be a better option.
“If you need to apply for a payment holiday or would like to reduce payments, contact your lender as soon as possible. If you stop making payments without letting them know, it will count as a missed payment, which will harm your credit score.
“For those already on a mortgage payment holiday, now is the time to assess whether you can restart your payments, or if you need apply for the extension. Whichever option you choose, it’s important to discuss your situation with your lender, to find the best solution for you. There are different options available depending on your circumstances.
“Having the choice to extend a mortgage payment holiday is an attractive option for many. But, as with the initial payment holiday, interest is still added, which makes the overall debt and repayments more expensive. If you can, it’s best to start making repayments.
“Amid the coronavirus crisis, customers on a payment holiday should check their free credit score and report regularly to see if their payment holiday has been recorded properly. If it shows a missed payment, they should raise this with the lender to make sure it doesn’t happen again next month.
“At TotallyMoney, we’re on a mission to improve the UK’s credit score and help our customers move on up to a better financial future. Now more than ever, it’s important that people have a full understanding of their financial decisions, so they can protect themselves from financial pitfalls and avoid any unwanted surprises.