Spring is on the way with the Easter break and millions of us will be planning holidays. Everyone enjoys a holiday and for most of us it is the perfect way to get away from something that is getting you down. Celebrities seem to flee the UK almost every week to get away from the paparazzi – or to make sure they are seen by the paparazzi – and catch some sun.
Sadly most of us don’t have that luxury of flying off every week although getting away from work, the day-day grind and the washing up is always welcome. The same goes for the bank balance – if money worries can get you down then getting a break from your financial obligations can be a blessing.
Not paying your mortgage every month might seem a dangerous step to take. But increasingly lenders are offering flexibility and mortgage holidays are becoming more widespread.
A mortgage payment holiday allows you to take time out from the financial burden of repayments. It might be you plan to go travelling round the world or are changing jobs or are starting a family. With the agreement of your lender you stop making payments on your mortgage for a set time period while you sort out your finances.
So if you think a mortgage holiday might be the answer to your situation, MoneyExpert.com will take you through the pros and cons…
Give your finances a rest
A mortgage is for most us our biggest financial outgoing and therefore puts the biggest strain on your finances. What most of us don’t realise is that many mortgage providers actually offer you the chance to take a break from your payments
In fact banks and building societies have increased the number of mortgage deals that include a payment holiday facility to allow struggling customers to relieve the financial burden of repayments. There are now 629 available on the market offering a payment break including deals from Nationwide, Lloyds TSB, Halifax, Northern Rock, First Direct, Bradford & Bingley and Barclays.
We’re all going on a payments holiday
Payment holidays allow you to stop your mortgage repayments for an agreed period. They are however normally only allowed if you have been a customer for a set period of time and have a good record of making the repayments on your mortgage.
The main reasons to take advantage of a payment holiday are if you unexpectedly become unemployed or switch jobs, take a career break, decide to start a family or lose another regular stream of income altogether. But in all circumstances the overriding reason is because you are no longer sure of your monthly income levels and you don’t want to miss a repayment. Missing repayments can have pretty drastic effects on your finances ranging from making it difficult to borrow money to even losing your home.
All mortgage firms say in their literature that if you don’t keep up repayments your home may be at risk and ultimately they always have the right to repossess. So anything which helps you to avoid missing repayments is worth investigating.
Don’t get swept away
It is important to understand that a payment holiday option within a mortgage should not be the main reason for switching or choosing a mortgage for the first time, but in an uncertain climate the attractions of a flexible mortgage with the option of a payment holiday is hard to ignore. MoneyExpert.com looks at all the products on the market and can help find the right mortgage to suit your financial needs – click here to compare the market.