Barlow Irvin Financial Services Director, Gary Oxborough, talks about the Mortgage Charter – a commitment from the FCA to support mortgage borrowers.
You may well have seen some positive economic news around inflation figures recently, which is certainly welcome, but we are not “out of the woods” yet when it comes to the increased cost of living that we have all felt recently. With Christmas approaching, many people may be feeling even more anxious around their finances than normal at this time of year.
A few months back, the Mortgage Charter was launched with quite a bit of press coverage, although it may have gone off the radar a little in recent weeks. The idea behind the charter is that mortgage lenders will be as helpful as possible to borrowers who find themselves struggling to maintain their mortgage payments during the current economic troubles. Most mortgage lenders have signed up to the charter and it can certainly provide help if you are worried about your mortgage payments. Support offered in the charter includes a promise that no borrower will be forced to leave their home within 12 months of their first missed mortgage payment and the guarantee that you will be able to lock into a new mortgage deal six months before your current one ends.
However, it is possibly the two highest profile sections that I want to talk about here. A new deal between lenders, the FCA and the Government permitting customers who are up to date with their payments to:
Switch to interest-only payments for six months
Or extend their mortgage term to reduce their monthly payments and give customers the option to revert to their original term within 6 months by contacting their lender
Whilst both options can be useful in the correct circumstances, it is vital that you do not take any action of this type without first obtaining professional advice. Switching to interest only or extending your mortgage term will result in increases in the overall cost of your mortgage and therefore the decision to do this should not be taken lightly.
If you are considering either of these options, please get in touch with a member of our award-winning team to talk you through your options and make sure you are making the right decision for both your current future situation.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.