Lenders can help when payment holiday ends
QI’Mcoming to the end of a six-month holiday from my mortgage payments, but unfortunately my financial situation hasn’t improved. I’ve heard the scheme is continuing.
Will I automatically be put on to a continued payment holiday?
ATHE
new rules from the Financial Conduct Authority say that after you have had a payment holiday for six months, you cannot continue on that route.
Your lender needs to find a tailored approach to help you with your outstanding loan.
I would suggest you contact your mortgage lender as soon as possible to discuss the best way forward.
QWE
took out a lifetime mortgage on our property a few years ago to release some cash.
Our grown-up daughter has moved back in with us and is thinking about paying off our loan and taking out a new mortgage. Can she do this?
ALIFETIME
mortgages can be repaid and in theory your daughter could buy the family home.
Lenders are a little tougher on borrowers during the current climate, so she needs to check her credit report to ensure all is in order for the best chance of getting a loan.
Her success will depend on affordability and her credit status. Just be wary that you don’t put your future home security at risk as you end up living in what will be your daughter’s home.
QACOLLEAGUE of mine has got behind on some debt repayments and it’s causing her a lot of stress.
Sadly, I don’t earn enough to be able to help her. Who should I encourage her to contact as I’m really worried about her?
AYOU
need to point her in the direction of one of the free debt advice charities, which will be able to go through her situation and help her find a way out.
These include Citizens Advice (citizensadvice.org.uk), Stepchange Debt Charity (stepchange.org/0800 1381111) or the National Debtline (0808 808 4000).
QMY
pension provider has told me I have a guaranteed benefit of £16,000. Can I take this as a lump sum. Will I pay a big tax bill?
ATHAT
depends on the type of pension you have and whether this is the total value of your pension savings or an annual income payment.
If it’s the total value, it may be possible to take it as a lump sum, with the first 25% tax-free.
If it’s a regular pension income, you may be able to take it once annually, but it will be taxable at your marginal rate. You need to go back to your pension firm and find out exactly what it is and then explore your options.