A Worcestershire property lawyer has welcomed a government scheme which has seen homeowners and landlords able to apply for a three-month mortgage holiday to get them through the coronavirus crisis – but warned it will take longer to pay off their loan.
Javed Ahmed, an associate at law firm mfg Solicitors, said the far-reaching provisions set out by the government will help those whose livelihoods have been affected by the shutdown of various businesses.
However, he has warned people against thinking the mortgage holiday won’t affect them in the long-term with mortgage terms being extended.
Mr Ahmed said: “Effectively, the payment holiday introduced by the government in recent weeks means mortgage payments are put on pause for a set period, currently three months.
“The offer is available to homeowners who had been up to date with payments before the crisis. Landlords can also claim however, they are expected to pass the savings onto their tenants who are struggling to make rental payments”
“The mortgage holiday is one of many measures by the government to help people through the crisis and quite rightly it is a welcome move. However, there are many people not reading or aware of the small print.
“The main downside of taking a mortgage holiday is that interest is still payable and it will build up over those three months, meaning you will owe more on the mortgage and it will take people that bit longer to pay it off.
“It is an option many people are taking and is clearly better to take a little longer to pay off the mortgage than risk losing your home altogether. I just want people to be aware of the full picture.”
Mr Ahmed added that homeowners and landlords do not need to have coronavirus to apply for the holiday period. It is available to those concerned about their ability to make payments, such as people who have lost work and salary as a result of the government-imposed lockdown.