The city regulator assured that mortgage lenders who continue to struggle to pay due to the impact of the Coronavirus will be able to obtain more support tailored to their needs in the coming months.
Current guidelines, which will expire after October 31, allow mortgage holders to ask lenders for paid time off if they struggle to fulfill their regular payments because their finances are temporarily affected by Covid-19. The Financial Conduct Authority (FCA), on Monday, published additional guidance for companies so they can target those who need it most with assistance that will be based on individual circumstances.
Some customers may still have payment issues, while others may suffer for the first time. Depending on the client’s circumstances, this could mean short term or long term support. The Financial Conduct Authority (FCA) said that when people need more short-term support, companies can continue to make arrangements for borrowers not to make or reduce payments for a specified period, to give customers time to get back on track.
Or it could be long-term support, including extending the mortgage repayment period, for example.
Clients requesting support will need to be mindful that they may end up paying more in the long term as interest accumulates on the outstanding debt. They will also need to consider any implications for their credit files – which may affect their ability to borrow in the future.