- Anyone worried about their mortgage repayments can call their lender for information and support, without any impact on their credit score and we would encourage you to contact your bank who are there to help;
- Customers won’t be forced to have their homes repossessed within 12 months from their first missed payment;
- Customers approaching the end of a fixed rate deal will be offered the chance to lock in a deal up to six months ahead. They will also be able to apply for a better deal right up until their new term starts, if one is available;
- A new agreement between lenders, the Financial Conduct Authority and the government permitting customers to switch to an interest-only mortgage for six months, or extend their mortgage term to reduce their monthly payments and switch back to their original term within the first six months, if they choose to. Both options can be taken without a new affordability check or affecting their credit score;
- Support for customers who are up-to-date with payments to switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability check;
- Providing well-timed information to help customers plan ahead should their current rate be due to end;
- Offer tailored support for anyone struggling and deploy highly trained staff to help customers. This could mean extending their term to reduce their payments, offering a switch to interest only payments, but also a range of other options like a temporary payment deferral or part interest-part repayment. The right option will depend on the customer’s circumstances.
Over the weekend Hunt gave a statement, saying: “There are two groups of people that we are particularly worried about. The first are people who are at real risk of losing their homes because they fall behind in their mortgage payments. And the second are people who are having to change their mortgage because their fixed rate comes to an end, and they’re worried about the impact on their family finances of higher mortgage rates.
“So I agreed with the banks and the principal mortgage lenders and the Financial Conduct Authority three very important things.
“The first is that absolutely anyone can talk to their bank or their mortgage lender and it will have no impact whatsoever on their credit score.
“The second is that if you are anxious about the impact on your family finances and you change your mortgage to interest only or you extend the term of your mortgage and you want to go back to your original mortgage deal, within six months, you can do so, no questions asked and no impact on your credit score. That gives people a powerful new tool for managing their monthly budgets – and it will begin taking effect within the next two weeks.
“And finally for people who are at risk of losing their home in that extreme situation, the banks and mortgage lenders have a number of things in place. The last thing that they want to do to repossess a home, but in that extreme situation they have agreed there will be a minimum 12 month period before there’s a repossession without consent.
“These measures should offer comfort to those who are anxious about high interest rates and support for those who do get into difficulty.
“Tackling high inflation is the Prime Minister and my number one priority. We are absolutely committed to supporting the Bank of England to do what it takes. We know the pressure that families are feeling. That’s why we’ve introduced big support packages around £3,000 for the average household this year and last.
“But we will do what it takes, and we won’t flinch in our resolve because we know that getting rid of high inflation from our economy is the only way that we can ultimately relieve pressure on family finances and on businesses.”
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Did any of us ever expect anything else ? 🤔
Other than not repossessing for 12 months what new stuff have lenders agreed to? Could they even get a possession hearing in less than 12 months?
Most of it was already standard practice:
Customers approaching the end of a fixed rate deal will be offered the chance to lock in a deal up to six months ahead. They will also be able to apply for a better deal right up until their new term starts, if one is available;
Most lenders have done that for years.
Support for customers who are up-to-date with payments to switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability check;
Again this has been standard practice for years with the majority of lenders.
The one that would be an improvement (if it happens) is:
Providing well-timed information to help customers plan ahead should their current rate be due to end;
Lenders have been appalling at communicating recent changes to their procedures.
TMW lengthened their product switch window from 6 weeks to 3 months without actually telling impacted customers. How many thousands of landlords could have snapped up a much lower rate if they had known they could apply 7 weeks earlier? The letter was still sent out 6 weeks before the end of the current fix.
Paragon now allow very restricted overpayment at product switch time. Previously a customer had to either roll onto the SVR for a month or pay an Early Repayment penalty if they wanted to make a lump sum payment. Now they allow a 48 hour window to make a lump sum payment. That 48 hours is from when you agree a new fix, not from when that fix starts. That makes a huge difference. It's an improvement but hasn't been communicated to their customers so we haven't had the lead time to financially prepare for it. Even cashing in an existing Stocks and Shares ISA takes more than 48 hours.
For remortgaging it would be useful to know the lenders exact criteria, especially around credit utilisation rates and overall lender exposure in an area. Weeks can be wasted applying to a lender who suddenly turns it down for some unfathomable reason by which time rates have massively increased elsewhere.
Well that IS a surprise
So no Repossession for 12 months, that’s a concession for Big Developer's it gives them an extra 12 months breeding space to get the multi storey portable cabins in the Sky ready, going up near you, the pilling, ground work, civil’s and first floor mass Concrete in full swing, ready for your stackable portable cabins, the Concrete mixer is churning away no stopping that.
Love the typo. It made me chuckle and conjured up all sorts of mental images.
This Government really have mastered the act of appearing to do something when in reality they've done bug ger all.
Good job they have the popular press in their pockets!!
Nothing new there then ..............
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