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New rules for those with cards, loans and mortgages says Martin Lewis

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New rules for those with cards, loans and mortgages says Martin Lewis

Martin Lewis says new rules will be proposed on Monday for anyone who owes credit cards, loans and mortgages.

The founder of Money Saving Expert says the rules will come as England prepares to institute a second ban on Thursday.

He went to Twitter Ovcer over the weekend to report breaking news about payment pauses during and after the lockdown.

Martin tweeted: “MORTGAGE NEWS (pls share): @TheFCA will propose on Monday that anyone who hasn’t had a payment vacation (interest still applies) can get one for up to 6 months.

“Those that have had can extend so the maximum sum is 6 months (if more is needed on a case-by-case basis). Don’t call the lenders just yet until it’s official.”

Martin said payment holidays will be extended for other financial payments, including credit cards, auto finance, and personal loans, reports MEN.

He wrote, “They will almost certainly then be concerned with extending the payment vacation for credit cards, car finance, personal loans, and more (though not definitely).”

The time window for homeowners to apply for mortgage leave is to be extended as part of support measures, as the lockdown restrictions are tightened.

The Financial Conduct Authority (FCA) announced on November 2nd that it will propose updates to its guidelines on assisting mortgage borrowers.

To help those financially affected by coronavirus, the FCA will propose that mortgage borrowers who haven’t had a payment vacation can apply for one – possibly with a term of up to six months.

Under the proposals, borrowers who already have a grace period of less than six months could extend that grace period. This would mean customers could have a maximum of six months of payment leave.

Previously, borrowers had a deadline of October 31, 2020 to apply for a vacation for mortgage payment.

After that date, lenders would provide bespoke assistance, which could potentially be reflected in borrowers’ loan records, the FCA previously said.

The Treasury Department announced on Saturday that borrowers can extend their mortgage payment vacation up to six months without showing it on their loan record.

The FCA said borrowers should only seek assistance when they need it. Paying vacation can cost more in the long run as interest rates are still rising and the loan has yet to be paid back.

The FCA said it will work with trade organizations and lenders to implement new guidelines as soon as possible.

Meanwhile, it was said that the lenders should not be contacted yet. Lenders will shortly be providing information on what this means for their customers and how to apply for this assistance.

Mortgage borrowers who have already had a six month deferred payment and are still having trouble paying should speak to their lender to arrange tailored assistance, the FCA added.

Tailored assistance, depending on a borrower’s circumstances, may include deferring payment of interest or amounts due, extending the term of the mortgage, or temporarily switching to interest-only payments.

The regulator is also considering the impact on consumer credit, which includes products like overdrafts, personal loans, and credit cards.

Given the variety of different products in the sector, the company is working quickly with industry to see if a similar approach should be taken for consumer credit products.

Recent figures from UK Finance show there are around 162,000 mortgage payment holidays, up from a high of 1.8 million in June.

A further 97,300 deferrals exist for credit cards and 64,400 for personal loans.

Initial industry research suggests that more than three-quarters of customers whose deferral has expired are now making repayments again, UK Finance said earlier.

Eric Leenders, General Manager of Personal Finance at UK Finance, said on Saturday: “Lenders are providing unparalleled support to help clients cope with the Covid-19 crisis and provide ongoing assistance to those in need.

“The industry is working closely with the Financial Conduct Authority to ensure that customers affected by the new lockdown measures announced tonight have access to the most appropriate assistance.

“Customers who want to access this support don’t need to contact their lenders just yet. Lenders will provide information on how to apply for this assistance after November 2nd. “

Robin Fieth, General Manager of the Building Societies Association, said, “Building societies and credit unions recognize the financial pressures on some households and will continue to work hard to serve customers, working closely with the FCA, over the coming months.”

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