Borrowers have been urged not to cancel their direct debits for mortgage repayments as rumours circle that many are being advised to do so before talking to lenders.
Rob Griffiths, director at the Mortgage Market Alliance, warned that whilst people are concerned about the time it takes to get a mortgage payment holiday they could seriously damage their credit records.
He said :We’ve heard of borrowers being told to cancel their mortgage direct debits immediately before they speak to their lender – we would seriously urge people not to do this.
“You must speak to your mortgage lender first to find out what options are available to you and in order to agree a formal arrangement.
“Ideally, take the options presented to you to your mortgage adviser so they can recommend the best course of action for you. But do not cancel direct debits with no agreement in place – if borrowers do this it is likely to be registered as a missed payment and could appear on their credit file.
“Even though borrowers might think time is of the essence, it is better to secure a formal agreement with the lender than act without it.”