Support for Mortgage Interest Discussion Area

Lucozade2

My friend is on pension credit and has been receiving SMI for some time. There were a few years when she received more than the interest payment so that became a credit to her mortgage lender. But recently because of SMI cuts, her mortgage lender has been using some of the credited amount for the monthly payments. As she is 70 now, her mortgage lender wants her to pay off the rest of her mortgage soon. With the money left from credit and her life insurance which she can cash in, she can just about manage to pay it off. The question is, is she allowed to use that bit of credit left to pay off her mortgage or does she have to pay this back to the government. Her mortgage lender is unsure.

rockingbilly

Lucozade2 wrote: »

My friend is on pension credit and has been receiving SMI for some time. There were a few years when she received more than the interest payment so that became a credit to her mortgage lender. But recently because of SMI cuts, her mortgage lender has been using some of the credited amount for the monthly payments. As she is 70 now, her mortgage lender wants her to pay off the rest of her mortgage soon. With the money left from credit and her life insurance which she can cash in, she can just about manage to pay it off. The question is, is she allowed to use that bit of credit left to pay off her mortgage or does she have to pay this back to the government. Her mortgage lender is unsure.

For a start I am amazed that someone who is 70 still has a mortgage to pay off! Most lenders in any event will have a cut off date when the capital should be repaid - that is normally by age 70.
If she has the means to repay it now then that is what she should do.
She will get a statement how much is owing in total including all fees and it is that amount that should be paid.
No, the credit can be used to set off against the debt,

NYM

pssst....

That post was made in July 2016. I imagine the mortgage has been sorted by now.

jobbingmusician

rockingbilly wrote: »

For a start I am amazed that someone who is 70 still has a mortgage to pay off! Most lenders in any event will have a cut off date when the capital should be repaid - that is normally by age 70.
If she has the means to repay it now then that is what she should do.
She will get a statement how much is owing in total including all fees and it is that amount that should be paid.
No, the credit can be used to set off against the debt,

A friend of mine who has recently turned 60 has been offered a £300,000 mortgage repayable over 14 years.....

disabled123

Disabled people were encouraged to part own their own homes. The new rules probably mean they will end up in a lot of debt and homeless. Any advice?

IAmWales

disabled123 wrote: »

Disabled people were encouraged to part own their own homes. The new rules probably mean they will end up in a lot of debt and homeless. Any advice?

Complain to your MP. Next time there's a general election get involved in campaigning for change, even if you're not able to get out your local (anything but the Tories) party will find you something to do.

Or if you can find somebody to bankroll it, take the govt to court for indirect disability discrimination.

Angiev

Can anyone advise on the expected changes to the SMI due in 2018.

trigger_fish

Angiev wrote: »

Can anyone advise on the expected changes to the SMI due in 2018.

As I understand it SMI is becoming a loan payable upon sale of the property. I suppose you have to hope that property values rise.



https://www.gov.uk/support-for-mortgage-interest/what-youll-get

Auntiemogs

Today I received my letter about my SMI changing to a loan. The letter said that I would receive a call from Serco within the next three weeks, which would inform me of the interest rate to be charged should I take out the loan. I've just spoken to someone at Serco, who told me that the interest rate will be the BoE Base Rate, and is estimated to be 1.7%. The letter says that the Government won't be making a profit on the loan, and will charge the rate at which it borrows money, so have I missed something (even with rates rising, this seems unusually high) - does the Government borrow at higher than the BoE Base?

poppy10_2

Auntiemogs wrote: »

I've just spoken to someone at Serco, who told me that the interest rate will be the BoE Base Rate, and is estimated to be 1.7%. The letter says that the Government won't be making a profit on the loan, and will charge the rate at which it borrows money, so have I missed something (even with rates rising, this seems unusually high) - does the Government borrow at higher than the BoE Base?

The government don't borrow from the Bank of England
They issue bonds (gilts) and the average rate that the government pay on these is 1.7% at present. The government is giving you the loan at the same rate that they are currently able to borrow from the wider market.