Support for Mortgage Interest Changes

anmarj

andyandflo wrote: »

Thanks NASA for that link - it answers my question perfectly.

So it seems that for upwards of two years at least the Government whilst saying that they will not make payments to cover arrears or capital, this has in fact been happening!!!!

So those with interest rates at say 4% have been having not only the interest paid but another 2%+ of the outstanding capital as well.

And they are now complaining that they will lose this advantage!!!!

Poor souls

it has always happened, in a way the fixed rate is a lot better than it was, before it used to be if your rate was below 5% it was paid at the rate your lender had, if above it was paid at fixed rate, the only time you knew about the cusotmer rate change was when the review form came back and then the customer would be on the phone complaining that they were not being paid what they thought they should get because they failed to tell us and then wonder why they were not going to get it backdated. the fixed rate is in a way a fairer system, there will alway be winners and losers in the smi, i remember when they changed the allowance for JSA to £200k, lots of calls from people thinking that PC were going up and complaining when they were told they did not qualify.

Kirri

andyandflo wrote: »

Thanks NASA for that link - it answers my question perfectly.

So it seems that for upwards of two years at least the Government whilst saying that they will not make payments to cover arrears or capital, this has in fact been happening!!!!

So those with interest rates at say 4% have been having not only the interest paid but another 2%+ of the outstanding capital as well.

And they are now complaining that they will lose this advantage!!!!

Poor souls

Regardless of how much some people were getting, let's not forget that some people who are unfortunately on higher interest rates will from Oct not be getting their full mortgage covered and the JSA is obviously not going to cover the shortfall as it barely covers much as it is and certainly not all the bills. Those people won't be able to use the previously applied overpayments (which they didn't ask for) to the standard minimum amount that will still be required every month from Oct on and there will be plenty of people worrying just how they will keep a roof over their heads when that reduction kicks in - just because you aren't able to make use of it, doesn't mean you need to be quite so down on those people who desperately need the payments to cover the full amount otherwise they may lose their houses, it's bad enough trying to get a job in this climate without having the stress of losing your previously hard worked for property. Any resultant housing benefit following repossession may even cost more to the DWP than a slightly increased mortgage payment did..

It would be nice to keep this thread more to the facts and help for people who are actually desperately in need and not use it as another downer on those who unfortunately need to claim.

theworldsgonemad

Just a quick note to andyandflo and perhaps as Kirri says let's get this thread back on track to advise and not condemn people.

We are on a fixed rate with 2 years to remain at 6.9%. Our SMI payments do not touch our actual repayments and certainly no overpayments. This is our problem and we live with it. Try not to band all people together andyandflo - everyones's situations are different.

Great thread by the way guys - the most helpful I have found.

andyandflo

Kirri wrote: »

Regardless of how much some people were getting, let's not forget that some people who are unfortunately on higher interest rates will from Oct not be getting their full mortgage covered and the JSA is obviously not going to cover the shortfall as it barely covers much as it is and certainly not all the bills. Those people won't be able to use the previously applied overpayments (which they didn't ask for) to the standard minimum amount that will still be required every month from Oct on and there will be plenty of people worrying just how they will keep a roof over their heads when that reduction kicks in - just because you aren't able to make use of it, doesn't mean you need to be quite so down on those people who desperately need the payments to cover the full amount otherwise they may lose their houses, it's bad enough trying to get a job in this climate without having the stress of losing your previously hard worked for property. Any resultant housing benefit following repossession may even cost more to the DWP than a slightly increased mortgage payment did..

It would be nice to keep this thread more to the facts and help for people who are actually desperately in need and not use it as another downer on those who unfortunately need to claim.

Hi, I'm not on a downer at all! I could turn this round and ask what can I do given my circumstances to get help towards my mortgage interest!

I accept the fact that what happened - happened and there is no way given all of the will in the world that the law can be changed. Your point that I seem to be missing in that there are others on a higher rate than they will receive help for in the future is not correct. Yes it will affect them but nowhere near the FULL amount I have to pay!

If you can't pay the mortgage - you lose the house! I'm sorry if that seems hard, but I have managed to pay my £90 of weekly interest every month out of the £202 pw I get from Pension Credit.
Is that fair - no it is not, but as I said - it's life - I have just got to get on with it or move into rented!

All that I am saying is - flipping the coin - those that have had help at 6.08% in the past AND their actual rate is lower, have had an advantage over those that have had to borrow at more than 6.08%.
What I was trying to make a point of, was that THOSE people should not be complaining now with the rate going lower to match those suffering in the past!

Do I believe that the excess that has been paid out in the past will be returned by the borrower to the Government - no I don't, it has been used to reduce the capital debt.

We are now entering a more level playing field than that this system has allowed to happen in the past. Of course there will be losers, but hopefully no winners, it is not fair to the thousands of hard working people where others have had the interest AND some capital paid each month.
There should be a maximum - either the rate as the Government is now setting OR the actual amount due if lower!!!

You can't seriously expect the Government to meet all of the interest for everybody even if the rate they pay is greater than the normal borrowing rate. In other words, those that have had to borrow at a high rate for whatever reason, bad credit rate, debts etc, should have public money to cover it!!

AND no there are no sour grapes - I accept life and what it throws at me. You win - you lose - name of the game!!
If you can't afford something you either sell it, return it or find a way of paying for it. You would with a car on finance so what is the difference between that and a property?

robster0512

Just joined so absolute newbie. Not even sure where to post this.
The story so far. Company went to wall in August 09, hadn't been paid for two months, went along to jobcentre to sign on for first time in 32 years, filled all forms in including help with mortgage interest. 07.09.09. Put on income based JSA as company hadn't paid any NI or Tax. Qualifying date for smi was 10.12.09. Nothing ever rcvd. Resent SMI forms 3 times(they hadn't rcvd the others) Last one recorded delivery. Have mortgage for £136k on £240k house but has been remortgaed twice. Initial mortgage of £58k with £30k to be added upon completion of required works. Remortgaged again in 2002 to double size of house open up doorways and bits help help wife who was diagnosed with MS.. Letter from DWP today will only pay interest on £58k. Have so far in the last 6 months managed to pay interest only from savings, but now down to last £2k. Do I just try and sell or fight DWP over payments. Thanks for any info/help

IamGullible

robster0512 wrote: »

Just joined so absolute newbie. Not even sure where to post this.
The story so far. Company went to wall in August 09, hadn't been paid for two months, went along to jobcentre to sign on for first time in 32 years, filled all forms in including help with mortgage interest. 07.09.09. Put on income based JSA as company hadn't paid any NI or Tax. Qualifying date for smi was 10.12.09. Nothing ever rcvd. Resent SMI forms 3 times(they hadn't rcvd the others) Last one recorded delivery. Have mortgage for £136k on £240k house but has been remortgaed twice. Initial mortgage of £58k with £30k to be added upon completion of required works. Remortgaged again in 2002 to double size of house open up doorways and bits help help wife who was diagnosed with MS.. Letter from DWP today will only pay interest on £58k. Have so far in the last 6 months managed to pay interest only from savings, but now down to last £2k. Do I just try and sell or fight DWP over payments. Thanks for any info/help

Any additional borrowings that have been added to your existing mortgage amount, and used towards home improvements, and only home improvements, are eligible for SMI upto a maximum of £200k of mortgage. I would appeal against the DWP decision, and attach your mortgagee Bank/BS statement/letter/supporting evidence with the appeal.

andyandflo

IamGullible wrote: »

Any additional borrowings that have been added to your existing mortgage amount, and used towards home improvements, and only home improvements, are eligible for SMI upto a maximum of £200k of mortgage. I would appeal against the DWP decision, and attach your mortgagee Bank/BS statement/letter/supporting evidence with the appeal.

Yes they are right in that you would only 'normally' receive help with the mortgage if IT WAS USED TO HELP PURCHASE YOUR HOME!

In your case the amount stated by the DWP is correct.

As regards 'home loans' this is a very difficult situation to comprehend.
Please see the following:




Housing costs for repairs and improvements can be met by income support, income-based JSA/ESA or Pension Credit for:-

• interest payments on a loan to carry out major repairs and improvements to the home. It does not matter whether the loan is secured on the property but it must be used for repairs and improvements
• a service charge to meet the costs of minor repairs and improvements on the home. If a client has taken out a loan to pay a service charge for major repairs or improvements, income support or income-based JSA may then help towards the interest payments
  
  interest payments on a loan to repay a previous loan which has been taken out to meets the costs of major repairs and improvements.

6

Repairs and improvements are regarded as major only if they are both in the following list and carried out to maintain the property fit for human habitation. For example, the replacement of lighting would not necessarily be major unless it had to be carried because existing fittings were dangerous. Major repairs and improvements are:-

• installing a bath, shower, washbasin, sink or lavatory and any necessary plumbing
• repairs to existing heating systems
• damp proofing and insulation of the home
• providing ventilation and natural lighting
• installing electric lights and sockets
• installing drainage facilities
• repairs of unsafe structural defects, for example, roof repairs
• fitting facilities for preparing and cooking food
• providing storage facilities for fuel and refuse
• adapting a home for the special needs of a disabled person
• providing separate sleeping accommodation for people of different sexes aged ten or over but under the age of 20 who live with the claimant and for whom the claimant or her/his partner is responsible.

7

If the client lives in a part of a building (for example, a block of flats), any part of the building will be treated as the client's home.

On a personal note I don't think it is right that having purchased the home more monies are borrowed for whatever reason which has the effect of increasing the capital value (doubling the size!) AND expecting the hard working taxpayers to fund that increase in value which you can access at a later date by selling!

robster0512

thanks for these replies, info.
Initial purchase of 58k was with restrictions by mortgage co to ensure remedial work was carried out to make house habitable.
Second remortgage to open house up to be large enough for wheel chair accesss for a wife who had been diagnosed with MS and has not claimed a penny for her illness since diagnosis in 1999.
I was a hardworking taxpayer for 32 years contributing some £278k in NI and Tax during my 32 yrs of work and would now like to get a little of what I am supposed to. But as I obviously have never had dealings with the DWP(they have another name) It seems totally wrong that as an ex hardworking taxpayer and not a career government artist, I will not recieve any assistance. But if I lived in a rented palace and had 17 kids and had never paid into the state system I would be quids in. Thank You

anmarj

dmg24 wrote: »

I can only find the figures up to August 2009, but at that point the figure was 4.34%. In the preceding six months, the figure varied between 4.08 and 4.34%.

I am off out now, but will try to find some more up to date figures when I get back.

we got sent email to day it is quoting 3.74% as current amount

citizen11

Kirri wrote: »

Regardless of how much some people were getting, let's not forget that some people who are unfortunately on higher interest rates will from Oct not be getting their full mortgage covered and the JSA is obviously not going to cover the shortfall as it barely covers much as it is and certainly not all the bills. Those people won't be able to use the previously applied overpayments (which they didn't ask for) to the standard minimum amount that will still be required every month from Oct on and there will be plenty of people worrying just how they will keep a roof over their heads when that reduction kicks in - just because you aren't able to make use of it, doesn't mean you need to be quite so down on those people who desperately need the payments to cover the full amount otherwise they may lose their houses, it's bad enough trying to get a job in this climate without having the stress of losing your previously hard worked for property. Any resultant housing benefit following repossession may even cost more to the DWP than a slightly increased mortgage payment did..

It would be nice to keep this thread more to the facts and help for people who are actually desperately in need and not use it as another downer on those who unfortunately need to claim.

What luck that individuals adversely affected by this change in policy have this 4 month warning now to sell their property to someone that can afford to service the debt. They can then move into to rented accommodation more appropriate to their financial circumstances.

There is considerable moral hazard in the state paying to service the debts secured against an individuals assets. I rent because I cannot afford a house yet the state will pay for a privileged few to own one.

This is an extremely positive move and one the coalition should be applauded for.