Housing benefit Mortgage Interest overpaymet

shygirltina · 26 October 2009 at 2:52PM

I am disabled and get a host of benefits including mortgage interest payments.
This is based on the full amount paid at a government set interest rate based on the bank of England rate plus a percentage.
On occasions this has been below the interest rate set by my mortgage provider and I have had to sell possessions to meet the shortfall. Due to securing a low interest rate I am now receiving interest on 28k at a rate higher than that which I am paying.
I used to ask for the excess in order to fund times when the interest rate swung the other way. The mortgage company are now holding the excess payment and occassionally reducing the capital (which is not allowd under benefit rules.
A while back I read an article whereby overpayments had been seized by dwp who then had to refund the person under command of the government who said that as the standard interest rate was set annually the lender was responsible for both under and overpayments of morgage interest - I would like to have the money rather than government or mortgage company -
Can anybody confirm ruling please

notlongnow_2 · 26 October 2009 at 6:01PM

Im not sure I understand. Are you saying you want to keep excess money given by the government which is intended for your mortgage provider?? but its not your money to keep.

[Deleted User] · 26 October 2009 at 6:08PM

This is how it works,the rate is 1.58% above bank of england base rate,which would be 2.08%,however this year the rate has been held at 6.08%(this is due for review in november and could change on 1/1/2010),each year the dwp contacts your lender for details on the outstanding mortgage they then pay the interest only part at the prevailing rate,regardless of what your lender is charging.They then pay direct to your lender this amount,your lender will advise then how much a month you have to pay,if the dwp rate is above your actual rate this will mean you paying less to your lender,if its below then you will pay more.Its possible if you dont do as instructed by your lender to get into an over payment situation,this would NOT be payable in any form to you,other than reducing you mortgage balance.

[Deleted User] · 26 October 2009 at 6:15PM

notlongnow wrote: »

Im not sure I understand. Are you saying you want to keep excess money given by the government which is intended for your mortgage provider?? but its not your money to keep.

the money is paid direct to the lender anyway

septemberblues · 26 October 2009 at 8:15PM

woodbine wrote: »

the money is paid direct to the lender anyway

But it's not, my mortgage interest is paid direct to me, in my bank account, every four weeks. Every calendar month the bank takes £XXX from my account (to pay the mortgage interest), and when the interest rates were higher I was able to keep the excess amount, now it's roughly the same as my mortgage interest rate there is no excess, and if the rates go lower than they are now I will have to fund the shortfall.

[Deleted User] · 26 October 2009 at 10:24PM

septemberblues wrote: »

But it's not, my mortgage interest is paid direct to me, in my bank account, every four weeks. Every calendar month the bank takes £XXX from my account (to pay the mortgage interest), and when the interest rates were higher I was able to keep the excess amount, now it's roughly the same as my mortgage interest rate there is no excess, and if the rates go lower than they are now I will have to fund the shortfall.

AFAIK its USUALLY paid direct to the lender,and yes you will have to fund any shortfall,if there is any,atm thats highly unlikely.

mummytofour · 26 October 2009 at 10:32PM

It is not always paid to the lender, it depends on the lender some do not have the DWP agreement.

tr82 · 26 October 2009 at 10:48PM

If it's paid 4 weekly ... that leads me to think they've set your account up on the mortgage interest direct scheme.

But they've set it up with the wrong account number ... your lender's given the DWP your personal account details rather than your mortgage account. And that is NOT how it's supposed to work. DWP should pay that money four weekly to your mortgage account, not a current account.

It's got to go to an account that you personally cannot access, to remove the temptation to spend that money on something else.

gjreeve · 10 January 2010 at 9:53PM

These are not overpayments.
The DWP use their own procedures to calculate the amount of MI benefit.
This has no legal (or moral) bearing on the amount your lender requires.
The DWP cannot take the money back, they have no legal grounds.

The excess payments will be short lived as the economy recovers and the Chancellor removes the cotton wool from all the home owners who are now in difficulty due to spending beyond their means, Boo Hoo.

Your lender has probably stopped paying the excess back to you, claiming CML/DWP/GOV has told them. Rubbish!!!, It's all lies because they want to keep the overpayment. I am threatning my lender with court action if they don't refund me.

YES I WANT IT - YES I AM KEEPING IT - YES I WANT A PLASMA LIKE ALL THE COTTON WOOL BUDS HAVE ALREADY

[Deleted User] · 10 January 2010 at 10:23PM

its upto the borrower to adjust what they pay after the dwp make their payments,and yes the dwp can and do take back any overpayments made in error,theyve just reclaimed £2.70 from me

NASA_2 · 10 January 2010 at 10:39PM

Its not your money so you should not be able to keep it when there is an excess being paid.

Housing benefit Mortgage Interest overpaymet

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