My daughter and her partner are due to move into a new home. Contract hasn’t been exchanged but the offer has been accepted, the mortgage has been sorted and the chain isn’t very long, so I don’t think it’ll be more than few months away (unless lockdown pushes things back even further.)
They’re both very excited – her partner has a secure job but she’s currently furloughed, so it’s a daunting time to move into a new home. My question is, should the worst happen and both were to either lose their jobs or, at least, put on furlough, would they be entitled to a mortgage holiday if they’ve just moved in?
If they move in before any job losses happen, they MAY be entitled to a payment holiday. However, at the moment these holidays are only available three months from the date of announcement (so, mid-June for mortgage holidays). This could be extended – especially if lockdown is extended – but we just don’t know. Anyone can ask for a mortgage holiday at any time – but if it’s outside of these temporary allowances, it could harm their credit score.
Income protection insurance on their mortgage package could help them, too. However, as your daughter has been furloughed, if her pay is only at 80%, the mortgage company may want to reassess lending affordability. This could mean the mortgage is rejected and only a lower amount offered. However, property prices may also reduce due to the stagnation in the market, so a reduced mortgage offer doesn’t necessarily mean they won’t get the house they want if the vendor is willing to renegotiate.
It should be noted, too, that lockdown doesn’t HAVE to stop them moving. Advice is to not move if you can avoid it – but essential moves are still allowed. Finding a removals company or self-hire van business that is still open could be tricky, though. If they want to set a date with their vendor, they can move even if lockdown is still in place. It’s not advisable, but it’s also not against the law.
I hope this helps!
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