Mortgage payment holiday

[collyp]

I am a few months in to my IVA and am thinking of requesting a mortgage payment holiday - but wonder if it is worth it?
My monthly mortgage payment is around £1,000 - if I was approved for a 'payment holiday', would this entire amount have to be declared to my IP and handed over? (ie. not worth my while at all)

[MelanieGiles]

What would be the reasons for this? If you weren't paying your mortgage, technically that saving ought to be handed over to the Supervisor of your IVA.

[collyp]

It would be to free up money to cover emergencies, etc. Although I am just about managing my payments, etc, with almost all household/food bills on the rise, and a steep car repair bill looming, I am anxious not to be caught short.

[luluj]

hmmmmmmm..not sure that you can do this - your IVA will probably need to benefit from it. Why not wait until you have a detailed receipt for your car repairs and then talk to your IP for support - maybe your IVA payment can be adjusted to help you through this time!

[indebtforever]

i wouldnt have thought you would have to pay it into the iva because the money you save from it for 1 month needs to be payed back to the mortgage by a certain time but i am not sure [:I]

[kallis3]

I would think it would probably be tagged on to the end of the mortgage, so even though you are having a 'holiday' now, you have still got to pay that money back.

[indebtforever]

i had a mortgage holiday and got 3 months to pay it back or the mortgage would have been in default i dont think it gets left to the end

[kallis3]

Mine won't give me a 'holiday' so I was only guessing.

We have a secured loan from which we can take a payment break once a year. All the 'missed' payments are tagged onto the end or the monthly payments can be adjusted higher to make up the shortfall.

[indebtforever]

i think the term mortgage holiday is just a word for a missed payment to the banks and they want it back i had a letter every month after it saying i was behind in payments so collyp i would ask your provider before you get the money and spend it as then you will have to look for £1000 whilst in an iva and i sometimes struggle to save 20p[:D]

[collyp]

No, a mortgage payment holiday is an AGREED arrangement - I would certainly not simply miss a mortgage payment without contacting my provider.
The sum would then be added to the mortgage, therefore increasing the term by a month AND incurring extra interest.

[indebtforever]

ok but have they actually told you it will be added to the end?because when i had one they wanted it back within a few months.

[collyp]

Well that's my experience from when I had a payment holiday with a previous mortgage firm a few years back.
I haven't actually enquired with my current company, as I wanted to know where I stood with the IVA first. I certainly don't want to end up increasing my mortgage term and interest total, if the entire payment would go in to the IVA fund.

[kal]

I have taken mortgage holidays previously with my lender (N Rock), and at the time it was great having that extra money, but the interest they add to your future payments is not good, and was not worth it really.
Not sure if you would have to pay it to your IP - I kinda guess so, or have a valid reason to be wanting that money.
k.

[MelanieGiles]

If you are having to do this because you are short in your monthly budget, it sounds to me as if this has been set at an inappropriate level. I suggest that you contact your IP to see if there can be any reduction in the payments, before trying your mortgage company.

[Adam Davies]

Hi Collyp
I think it may be a useful to have this option but I would not draw on it until needs be.
Enquire about it so that you are fully aware of the logistics of using it but have it there as an emergency fund.
If you draw it now you will only use it and end up paying more in the long run.
Have it there for peace of mind
Regards