One of the most common concerns for mortgage borrowers who are considering taking a mortgage holiday is whether or not it will negatively impact their credit rating. After all, your credit rating is a crucial factor that lenders use to determine your creditworthiness, and any negative marks on your credit report could make it difficult for you to secure future loans or credit.
The good news is that taking a mortgage holiday itself should not negatively impact your credit rating. That's because lenders are aware that many borrowers may need to take a break from their mortgage payments due to unforeseen circumstances, such as job loss or illness. As a result, the credit bureaus typically do not view mortgage holidays as a negative mark on your credit report.
However, there are some important caveats to keep in mind. First and foremost, if you miss a mortgage payment without first arranging a mortgage holiday, this will have a significant negative impact on your credit rating. So, it's crucial that you speak to your lender and arrange a mortgage holiday before you miss any payments.
Additionally, it's worth noting that while taking a mortgage holiday itself will not negatively impact your credit rating, it may have an indirect impact. For example, if you have other debts that you are struggling to repay, taking a mortgage holiday may free up some cash flow that you can use to pay off those debts. This, in turn, could help you improve your credit rating over time.
Overall, if you are struggling to keep up with your mortgage payments, taking a mortgage holiday can be a lifeline that can help you get back on track. While it's important to be aware of the potential impact on your credit rating, in most cases taking a mortgage holiday will not have a negative impact. Just be sure to speak to your lender and make arrangements before you miss any payments.
If you need help understanding your mortgage options or arranging a mortgage holiday, our team at CLS Money is here to help. Contact us today to learn more about how we can assist you in navigating the mortgage process.