Mortgage protection on benefits

Becles

I got told that if the cash passes from insurance company direct to your mortgage lender then it doesn't affect your benefits, but if you get the cash and then you pay the mortgage, then it does count as income and your benefits are affected.

I don't know if that is correct or not though, as I know some of the info I got when I was a single parent wasn't 100% accurate!

petunia100

madhouse wrote: »

We were told any payment protection that you did not profit from e.g. loan or mortgage for the exact amount or lower are not taken away from benefits

I wonder if the amount is more, which mine would be by about £50 per month whether you could op to overpay the mortgage??

Oldernotwiser

petunia100 wrote: »

I wonder if the amount is more, which mine would be by about £50 per month whether you could op to overpay the mortgage??

I would strongly doubt it, otherwise you'd be using public money (IS) to repay a debt, albeit indirectly.

petunia100

Oldernotwiser wrote: »

I would strongly doubt it, otherwise you'd be using public money (IS) to repay a debt, albeit indirectly.

Not really because I've been paying the insurance all these years, so why shouldn't I get the full pay out.

cw18

Oldernotwiser wrote: »

I would strongly doubt it, otherwise you'd be using public money (IS) to repay a debt, albeit indirectly.

I can see where you're coming from, but if the payments are going directly to the mortgage company (so they don't count as income), then you'd actually have a struggle to claw back that £50/month from them !!

And at the end of the day, when the insurance stops paying out it means less owing on the mortgage, so a lower amount for interest to be added to, so less ISMI that can be claimed -- hence saving the Benefits Agency some money at that point (though I know they probably wouldn't see it that way if there was a way of getting the £50 back each month!)

madhouse

petunia100 wrote: »

I wonder if the amount is more, which mine would be by about £50 per month whether you could op to overpay the mortgage??

Ours was slightly more also but once they deducted the monthly payment for the protection it was fine. Also the payment did not go straight to the mortgage company but came to us and then to them, they were also happy with this as they could see it was being paid. They preferred it to go direct but our company would not do this.