Affect of a Mortgage holiday on Credit Bureau rating

Darsad

looking at applying for a mortgage break with my bank but as i currently have a good credit rating I am concerned about what or how a mortgage break would be viewed by the credit bureau . Would six months of non payment with the banks approval show up as a negative for any future loan applications I may wish to make regardless of the rationale behind such breaks .

unclebill98

It would not show on a ICB. However it will harm your credit rating in that bank if the break is due to not being able to pay your mortgage.

chris85

No effect on ICB record. Also some mortgages allow a mortgage holiday built into the mortgage. I know UB did before where you could have a 6 month holiday for whatever reason. Was a feature of the product sold.

unclebill98

It sure was, but now a days you gotta be screwed to get it.

chris85

unclebill98 wrote: »

It sure was, but now a days you gotta be screwed to get it.

Not necessarily. Many Ulster bank accounts have it and its a no questions things. You ask and they have to give as its part of the mortgage agreement to have one payment holiday for six months.

I think it was put on the mortgage agreements to entice young people who were concerned that by tying down to a mortgage they would never be able to travel again and the payment holiday built into the product helped.

Also some UB mortgage products have this, not all. Dont know about other banks.

unclebill98

True it's on your offer letter. However the bank have changed this and can do so. They've enforced it too.

I've yet to see someone challenge it. Should be challenged.

naughtysmurf

Took a mortgage break for three months earlier this year, it was allowed, part of the original mortgage offer, allowed three over the duration of mortgage.

IT DID show up on my ICB rating as a M for the three months (monatorium)

I don't think it's an issue, you will not have missed a payment, it's an arranged approved break between you and your mortgage provider, hasn't affected the two loan applications I've made since

You can always ring the ICB and ask them, they are quite helpful

Darsad

Had a look at my loan offer and there is an option to take a once off 6 month or two 3 month breaks with the banks approval.
I spoke to icb and they confirmed that it will show up as an M as said above on any credit rating query and the person I spoke to at ICB was pretty sure that it would not be viewed as a negative. I also consulted with a financial advisor who informed me that it could be viewed as a negative depending on who is looking at the form and for what reason but the ICB score would be unaffected it would however be preferable to invite no queries on an ICB report. So I have decided to try and hold off on the break and muscle through the present diffs just hope Santa
wont lean on the pen too hard this year.

unclebill98

Is only a negative cause you'll be asked to explain why you needed a payment break.

If it's cause of personal hard times that no longer exist then it's going to be ok.

Darsad

unclebill98 wrote: »

Is only a negative cause you'll be asked to explain why you needed a payment break.

If it's cause of personal hard times that no longer exist then it's going to be ok.

Well maybe but given the present economic climate in the eyes of the bank I think it could be a case of if your explaining your losing !

naughtysmurf

As far as I know, if you take the mortgage break for six months and in the future you apply for a new loan and the potential new loan provider does an ICB check on you, all they will get is your ICB credit score, say 250 or whatever it is.
If they want further information like who you owe money too etc, they have to pay for it, and not many do

I would have had (& still do) an excellent credit score, took my three month break, three M's showed for Nov, Dec, 2010 & Jan 2011.

In April 2011 applied for and got 14K loan, in Sept 2011 applied and got 1.5K loan, no problems with either loan application. Both institutions checked my ICB score.

Just my experience

Darsad

Tks for the info