Support for motgage help. Will it be deducted from my Job Seekers Allowence?

Muttleythefrog

spendaholic wrote: »

I've received the same letters today.

The letter regarding the mortgage states that £43.61 will be deducted from my allowance every week.

The letter regarding my JSA states that my weekly allowance will change from £67.50 a week to £64.50 a week due to a change in deductions and a change in the cost of where I live.

I don't know why my JSA has dropped to £64.50 as I've not been on it for 6 months yet, only 3, but I only just completed the mortgage benefit procedure.

If it's dropped to £64.50 a week and that's what I'll get after they've paid the mortgage, that's fine. If they're going to take the £43.61 off that, that will leave me with less than £21 a week for everything else as I have no other income and no other benefit.

If they're paying all of the interest and I still get the £64.50 a week, I wonder if I'll still be able to contribute as mine is a repayment mortgage rather than an interest-only mortgage.

If I get any casual or part time or freelance work meanwhile, they'll let me have the first £5 a week, then they start to deduct that too from my benefit. At this rate, I'll be paying them. :eek:

Can anyone please clarify as the offices will be shut now until Wednesday and it will be a shock to my bank account if I only get £21.

Ta muchly.

I can't explain the £3 drop in JSA.... but then I've only just got up..lol

But regarding the main concern.. it is just a typically badly worded DWP letter that due to beaurocracy will no doubt stay badly worded until as such time as humanity ceases to exist. What they are doing is adding your SMI onto your JSA and then taking it off you to send to your lender. The letter may make it appear they're taking it out of your regular JSA payment but this won't be the case and you'll get 60 odd quid a week.

Regarding the mortgage... the SMI is paid based on a universal annual interest rate (rather than the actual one applying to your loan) and so will almost certainly not directly correspond to the actual interest applying on your mortgage. Add to that the fact the SMI is probably paid every 4 weeks as opposed to your repayments monthly and the shifting balance on your account (which I understand the DWP will check each year with your lender) and it can appear messy. Your lender will probably just treat your SMI payments from the DWP as overpayments to your account... and continue to take your usual monthly repayments... if they're a decent lender they'd no doubt be flexible with you if you needed to reduce payments (especially in light of the SMI) or perhaps even switch to interest only.

(The current APR used for SMI is 3.63%)

Pont

Muttleythefrog wrote: »

Your lender will probably just treat your SMI payments from the DWP as overpayments to your account... and continue to take your usual monthly repayments... if they're a decent lender they'd no doubt be flexible with you if you needed to reduce payments (especially in light of the SMI) or perhaps even switch to interest only.

(The current APR used for SMI is 3.63%)

I have a friend in the same situation, and am worried that I've advised her incorrectly.

She has a repayment mortgage of around £500 per month. It seems like the SMI will amount to around £240 a month leaving her a shortful of £260 month to cover the full repayment. I advised her to contact her mortgage provider and suggest that she continues to pay £260 a month so that the full amount continues to get paid.

Are you saying that the mortgage company is unlikely to accept this arrangement and will treat SMI as overpayments only?

Would really appreciate any thoughts on this, as even though I was only trying to help, I now feel I've given her bad advice.

kayn123

I am single and live in my own home I get £138.00 per week JSA.
The DWP takes £95.50 per week from my JSA towards my interest payments which goes straight to my lender. I am therefore left with under £36.00 per week to live on because I receive a little pension of £122.00 per month which they take into account.
If I was living in a rented house then the local council would pay my rent and my council tax.
So much for those of us who have paid their taxes and then find themselves redundant after 30 years of work.
I have contacted my local MP who has written to the Minister Esther McVey asking her to consider these points about the particular difficulties presented to homeowners as opposed to those who rent when having to rely on state benefits.
If those of us write to her we may get some help the address is:

ESTHER MCVEY PM
DEPARTMENT OF WORK AND PERSIONS
HOUSE OF COMMONS
RICHMOND HOUSE
WHITEHALL
LONDON
SW1A OAA

and stop this archaic system. Why should we suffer.

lld01

You would still recieve £36 per week even if you were not claiming assistance with the mortgage, as housing costs element is an extra amount which is added on to the overall assessment then deducted again to pay to the lender.

If you were renting, its is quite possible you wouldn't receive full assistance (especially if privately renting, or if you have a "spare" room) - this depends on your age / circumstances and the HB / LHA rate for your area.

You should be receiving Council Tax benefit anyway - this would not change.

There has been mention of forthcoming changes to the Support for Mortgage Interest scheme under universal credit which include the govt possible placing a charge on the property when awarding assistance.

Horseunderwater

If you only get a pension for £122/month then DWP have worked out your benefit entitlement wrongly. JSA is £71.70 / week + Pension £28.15 = Total £99.85 - so if I recall correctly they should possibly be taking away only the £28.15 per week. And should pay your lender the SMI directly so ask them to look at their paperwork again. Unless you have another income source or some capital stashed.

kayn123

thanks for the replies but I have a £750 mortgage and only get help with half the little I do get goes towards the rest of the mortgage and I live on next to nothing as I still have to pay all my bills and eat............see what I mean!!

lld01

DWP will only help with the portion of the borrowing that was used for house purchase (or essential home repairs), up to a max of £200k @ 3.63%.

Have you spoken to your lender about the difficulties you are having? Can they arrange to switch it to interest only for a while, or arrange a payment holiday?

kayn123

thanks but I have already done all this I am on interest only
I was posting the address so that anyone else in the same situation could contact the government the more that do the more help there will be for homeowners

mikey_bach

You should get £71.70 minus your pension £28.15 = £43.55 per week paid to you per week what they pay to your mortgage is extra.
Do you have capital that counts as an income as well...

tea_and_cake

Hi there seems to be conflicting reports on this thread im just trying to get some clarification as im still a bit lost with all this and cant phone the number provided until Monday, ive just received the letter today also saying HOW MUCH WE WILL DEDUCT FROM YOUR ALLOWANCE interest each week £50.25 weekly total £50.25, it also says in the letter "we will take the money from your jobseekers allowance to pay straight to your lender, this seems crazy as its robbing peter to pay paul as they say, im using my jsa to help pay my mortgage anyway so this leaves me in exactly the same position plus all the hassle of contacting my mortagage company setting up new direct debits all the paper work to be in exactly the same position? this will leave me with £20 a week to live off?

hopefully I have missed something here or can get some answers from people who are in the same situation,

Thanks.