Landlords have been sharply criticised by a broker for allegedly trying to cash in on the Coronavirus crisis by demanding mortgage holidays they do not absolutely need.
Mortgage for Business has issued an outspoken statement claiming only “a handful” of landlords contacting its switchboard about repayment holidays are raising legitimate concerns.
It says that while some landlords may be in genuine financial hardship as a result of COVID-19, most have sufficient means to get them through a difficult period.
Steve Olejnik, managing director of Mortgages for Business says: “Only a handful of are raising legitimate concerns about how to pay their mortgage in the face of the COVID-19 pandemic. Quite apart from the moral implications of abusing an emergency mortgage repayment scheme brought in at a time of national crisis, it could play out badly for the landlord.”
His firm’s statement then suggests that “landlords need to think long and hard before submitting a request for a payment holiday to their mortgage lender.”
Olejnik continues: “Landlords must be aware that any requests could potentially damage any approaches to that lender. Lenders expect landlords to be able to cover void periods under normal circumstances – where a property is empty, and a landlord isn’t getting any rent – so they won’t take kindly to landlords trying to take advantage of them just to build up some cash reserves.”
He goes on: “One borrower with three live cases with their lender approached them for repayment holidays on another, existing loan. The lender immediately cancelled all three. Smart landlords, who want to capitalise on short-term house price falls and expand their portfolios when the lockdown is lifted, should think long and hard before approaching their lender.”
The broker says that a landlord’s tenant may be in distress and unable to make rental payments, but to benefit from the scheme, landlords also need to unable to meet their mortgage repayments.
Olejnik says: “Don’t jump on the repayment holiday bandwagon! Any deferred payments will have to be made at some stage and it could create problems down the line – especially when you come to refinance or grow the portfolio.”
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Didn't seem like 'slamming' to me. More like legitimate concerns and good advice.
and the moral of the story for Landlords, is - don't give any business to ' Mortgages for Business. '
Yes the void for landlords might harm any further lending application. But this is unfair since tenants who dont really need to can get away with it - and no-one will care if we cant get the payment voids back from them. Landlords get it in the neck every time.
Yes the void for landlords might harm any further lending application. But this is unfair since tenants who dont really need to can get away with it - and no-one will care if we cant get the payment voids back from them. Landlords get it in the neck every time.
Nobody is interested in Tenants abusing the system, apart from Landlords, and even those can't be arsed to collaborate or join together to bring a collective voice.
Its no wonder we're 'lambs for the slaughter'
The moral of the story as far as LL are concerned is to ensure they do their damnedest to never contact their lender about any mortgage payments.
Never allow a lender to know there might be some distress.
They expect LL to be capable of paying the mortgage always; no excuses no matter what.
LL would do well to ensure they have sufficient resources per property to pay the mortgage for at least a year without rent.
After all it can easily take a year to evict and will certainly take longer when only S8 remains.
Very few tenants carry on paying rent if subject to eviction proceedings.
Only if a LL is in desperate straits should they consider a mortgage payment 'holiday'.
Never give a lender cause to carry out reviews etc.
Keep away from the lender.
Just pay the monthly mortgage payments and they will usually leave you alone.
Be aware that lenders monitor credit files on an ongoing basis so try to avoid blemishes on your credit files or building up long term unsecured debts.
Of course there is NO such thing as unsecured debt as any creditor will quickly apply a charging order to any property asset and BTL lenders don't like that.
In short keep your head below the parapet and never give a lender an inkling that you might be suffering some distress.
So become resilient and then lenders will leave you alone!
I am not sure why a landlord would take a mortgage holiday when they dont need one? Affects your credit worthyness, makes the mortgages more expensive, and they then still need to be paid anyway. Where is the logic?
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