How the banks evaluate the repayments postponement
Quite recently the Government passed a bill allowing people who experienced drop in their income to apply for repaymetns postponement with the idea that this will not be reported negatively into debt registry. Technically, they did what they promised, but...
Under normal circumstances if you ask for repayment postponement with your bank and they approve it, this is reported into the debt registry as a negative information indicating that the client most likely had some financial troubles.
With this bill passed, now this information is not marked into the debt registry as negative, but it is still visible to all banks when they look into the debt registry, as they always do during approving new repayments. We informed about this possibility in our blog post about How to apply for postponement.
I have the repayments postponed on my mortgage/loan and I want to apply for a new one - is that a problem?
Yes, it can be. As we emailed all the banks we cooperate with about this question "how do you review the fact that client has repayments postponed" - the answers were quite negative.
Banks are arguing in the lines of "this repayments holiday is not a flat rule for everyone, only those in needs should use it and since their income dropped, we have to consider that within the application". Some banks also expressed there is a difference between postponement for 3 or 6 months.
Should I wait with my mortgage postponement then?
Definitely. If you do not need the postponement - do not take it just because you can. Even though it is not marked negatively, banks still see that information and can work with it as they want which can eventually lead into denying application which would be approved otherwise.
If I wait with my new mortgage application after the end of my repayments holiday and ask afterwards, is that going to be OK?
To be honest, we do not know how the banks will react when the time comes. Of course after some time it shouldn't be considered, but whether that is immediately after you start repaying or after few months - we will know later by end of the year.
So what would be our advice for those who already applied for postponement and want to get a new mortgage soon?
If you explain to the bank that your income wasn't affected at all, then we think you should still succeed with the application, at least in some banks. If you are for example self-employed with repayments postponed and you are experiencing a drop in income, then don't have too big expectations. :-(
For free help with getting a new mortgage, email Robin at email@example.com