Many people have difficulty meeting their mortgage
repayments for reasons such as increasing interest rates, higher
household bills, redundancy, relationship breakdown and ill
health.
The frequently asked questions below can help if you are
having problems paying your mortgage.
I am having problems paying my mortgage what can I
do?
If you are having problems paying your mortgage and are in
arrears, help and assistance is available. Act
now to stop the situation becoming worse.
Talk to your lender and don’t ignore any payment problems
- mortgages are 'priority debts', which means you should pay them
first as otherwise your home could be repossessed. Pay what you can
and contact your lender as soon as you start having payment
problems. Your lender may : -
- Agree to change or lengthen the term of your homeowners
loan
- Accept reduced payments from you in the short term
- Add your arrears to the amount you borrowed
- Reduce your monthly mortgage payments for a certain period
- Spread the repayment of the total amount you owe
- Offer you a better loan rate
- Allow you time to sell your home
- Many major lenders have also agreed to wait at least
three months before taking repossession action and the new Civil
Justice Council protocol says repossession should be a last resort.
The law also says lenders must treat you fairly and take all your
circumstances into account.
Is there is anything you can suggest to help me pay my
mortgage?
Mortgage Protection Insurance
If you've lost your job or you're too ill to work, check whether
you have 'mortgage protection insurance' to cover your payments.
The payments may not start straight away - so contact your insurer
as soon as possible.
Support for Mortgage Interest - Income
Support
If you are on a low income and have a mortgage or loan taken out
to buy your home, Income Support may help you with the interest
payments after you have been receiving it for 13 weeks (Income
Support cannot help with repayments of capital or with the premiums
on any endowment or pension policy connected to the mortgage).
There is a limit of £200,000 on the amount of capital that
Income Support can help with the interest on. This means that if
the outstanding capital on your loan, or loans, is more than
£200,000 then only the interest on £200,000 can be met through
Income Support.
Where a mortgage is taken out partly for another purpose such as
buying a car or providing a business loan, the Income Support
scheme will only pay interest on the part of the loan associated
with the house purchase or repairs.
Other Benefits
Making sure you claim all the benefits you are entitled to such
as Working Tax Credit, Child Tax Credit or Council Tax Benefit can
help raise your income. To check if you are entitled to other
benefits contact the Job Centre.
What other help is available?
Homeowner Mortgage Support
Homeowners Mortgage Support (HMS) is designed to help households
whose incomes have dropped as a result of the economic
downturn.
For further details visit
the
Homeowners Mortgage Support website.
Mortgage Rescue Scheme
The Mortgage Rescue Scheme is a package of measures designed by
Government to prevent some of the most vulnerable families losing
their homes and experiencing the trauma of repossession. This
scheme, run in each area by the local housing authority, aims to
help up to 6,000 vulnerable households across the country over two
years and is targeted at those who would be eligible for
homelessness assistance and who meet the required eligibility
criteria of the scheme. If you are eligible you could get financial
help to stay in your home.
You can make an application to us for help from this scheme. You
will have to be assessed as a household in priority housing need
(usually through having dependant children). You will also need to
meet other criteria.
There are two mortgage rescue options:
Shared equity - this is designed to help if you
have experienced payment shocks and are in need of some help in
paying your mortgage. A shared equity loan could pay off a
proportion of the mortgage. In return you would have to pay a
subsidised rent on the share that the housing association buys,
which could be between 25% & 75% of the mortgage.
Mortgage to Rent - this is designed to help the
most vulnerable households on low incomes with little chance of
sustaining a mortgage. A designated housing association could pay
off the mortgage completely by buying the property outright. You
would then stay in your home and pay rent to the housing
association. The rent will be an intermediate rent (currently
defined as 80% of the likely market rent for the property)
More information about the scheme is available in
the Government Mortgage Rescue Scheme
leaflet.
For further advice and information about any aspect of paying
your mortgage the National Homelessness Advice Service have
produced an excellent information leaflet
Are you worried about your mortgage?
Is there anyone in the Council that I can talk to about
my mortgage problems?
Households in financial difficulty and who have queries about
their housing can approach
the Housing Advice
Team for advice and assistance.
