Help withmortgage interest

seventyandrockin

As you may have guessed from the name we are pensioners in our seventies. We have an interest only mortgage of £110,000.
We receive coucil tax and pension credit benefits. According to the current newsletter we should be entitled to assistance of 6.08% but the benefits office will only give us support for a max. of £39,000.
Can anyone explain why.? Thanks, S. & R.

dmg24

Have you remortgaged at any point?

mitchaa

As above, you only get help on the original amount.

If you have remortgaged to release equity, you cannot get assistance with that and rightly so as everyone would then start releasing equity and blowing the lot and expecting the taxpayer to pick it up.

An interest only mortgage of over £100k in your 70's? Just how on earth have you managed that? Are the banks not worried about how you are going to pay this amount back?

andyandflo

seventyandrockin wrote: »

As you may have guessed from the name we are pensioners in our seventies. We have an interest only mortgage of £110,000.
We receive coucil tax and pension credit benefits. According to the current newsletter we should be entitled to assistance of 6.08% but the benefits office will only give us support for a max. of £39,000.
Can anyone explain why.? Thanks, S. & R.

Maybe I can add a bit. We too have a mortgage of £103,000 (my wife is 66 and I am 61). We also get council tax benefit and ESA/ Guaranteed Pension Credit. We get no help with our mortgage!

I had to leave work due to severe illness when I was 60. The intention was that we had some shares and togther with my pension lump sum when I should have retired at 65, this would have been enough to repay the debt. However the company has now gone bust along with the Pension scheme. I have had £2000 from them but that's it. The shares have lost about 60% of their value and we have had to cash some in to live off.

In total our savings including shares is about £8,000 now.

When we bought this little house, a friend leant us the money whilst we got a mortgage. As soon as we got the mortgage, we paid him back in full six weeks later.

But because we didn't have a mortgage to buy the property, it was treated as though we bought it ourselves and then re-mortgaged.

All of our life savings were put down as a deposit (£85,000).

If we had have waited to buy it when the mortgage came through, then yes we would be getting help on £100,000 of it. This was all down to the builder as he kept pushing to complete the sale and it was his suggestion that we borrowed the money from wherever until the mortgage could be sorted.

You don't get help for a re-mortgage!!

Whilst there is about £100,000 of equity in it at the moment, we are intending to hand the keys to the bank to sell it as we can no longer afford the monthly payments and hopefully get a Council Sheltered flat. With what money we will get from the sale and the value of the shares this will have to be used to pay the rent, before we can claim housing assistance.

If you have done an equity release at least you both can stay in your home without having to pay any mortgage

dmg24

andyandflo wrote: »

Maybe I can add a bit. We too have a mortgage of £103,000 (my wife is 66 and I am 61). We also get council tax benefit and ESA/ Guaranteed Pension Credit. We get no help with our mortgage!

I had to leave work due to severe illness when I was 60. The intention was that we had some shares and togther with my pension lump sum when I should have retired at 65, this would have been enough to repay the debt. However the company has now gone bust along with the Pension scheme. I have had £2000 from them but that's it. The shares have lost about 60% of their value and we have had to cash some in to live off.

In total our savings including shares is about £8,000 now.

When we bought this little house, a friend leant us the money whilst we got a mortgage. As soon as we got the mortgage, we paid him back in full six weeks later.

But because we didn't have a mortgage to buy the property, it was treated as though we bought it ourselves and then re-mortgaged.

All of our life savings were put down as a deposit (£85,000).

If we had have waited to buy it when the mortgage came through, then yes we would be getting help on £100,000 of it. This was all down to the builder as he kept pushing to complete the sale and it was his suggestion that we borrowed the money from wherever until the mortgage could be sorted.

You don't get help for a re-mortgage!!

Whilst there is about £100,000 of equity in it at the moment, we are intending to hand the keys to the bank to sell it as we can no longer afford the monthly payments and hopefully get a Council Sheltered flat. With what money we will get from the sale and the value of the shares this will have to be used to pay the rent, before we can claim housing assistance.

If you have done an equity release at least you both can stay in your home without having to pay any mortgage

Which explains why in a recent thread you were so bitter towards those who do receive SMI?

andyandflo

dmg24 wrote: »

Which explains why in a recent thread you were so bitter towards those who do receive SMI?

That may be the case!

I have never asked anything of this Welfare State and the only time I do I am shafted!!

Why am I singled out? Yes you could say that I am bitter, angry and upset not just for me but my wife also.

We stand to lose all or most of our life savings, as well as having to pay the mortgage out of our savings since October 2009.

Yet others are able to claim and protect their equity. It doesn't seem fair or just!

dmg24

andyandflo wrote: »

That may be the case!

I have never asked anything of this Welfare State and the only time I do I am shafted!!

Why am I singled out? Yes you could say that I am bitter, angry and upset not just for me but my wife also.

We stand to lose all or most of our life savings, as well as having to pay the mortgage out of our savings since October 2009.

Yet others are able to claim and protect their equity. It doesn't seem fair or just!

You were very harsh to people on the thread in question, basically telling them that if they could not pay their own mortgage they should rent. Perhaps you should take your own advice, if that is what you believe everyone else should do?

IamGullible

andyandflo wrote: »

I have never asked anything of this Welfare State and the only time I do I am shafted!!

Never asked anything of the Welfare State :question:

andyandflo wrote: »

We also get council tax benefit and ESA/ Guaranteed Pension Credit.

andyandflo

dmg24 wrote: »

You were very harsh to people on the thread in question, basically telling them that if they could not pay their own mortgage they should rent. Perhaps you should take your own advice, if that is what you believe everyone else should do?

Yes I am intending to rent, I have no choice because I can't afford the mortgage payments. I could try to hang it out, but don't see the point as I will be in the same situation.

I thought about selling, taking what I can and using that as a down payment on another property. But because I am deemed to have bought this one without a mortgage, they would link any new mortgage with my current one. As such, there will never be the opportunity to obtain MIS no matter what I do.

andyandflo

IamGullible wrote: »

Never asked anything of the Welfare State :question:

Yes, sorry it does sound a bit stupid. It is just me getting totally pi***d off with life.

Losing almost everything to a builder that I tried to help out.

old_and_broke

Today I have been notified that the SMI rate allowable from my pension credit has been reduced from £112.83 p.w to £65.71 p.w. A reduction that will mean I have to find another £47.12 p.w from my pension to maintain my interest only mortgage payments. From 4th October this will obviously leave me with only £53.57 p.w. for heat, light, food, clothes, travel. maintenance etc. etc. - my fuel and utility payments alone take at least £20 of that, leaving less than £5 per day for everything else. I don't think its possible to eat and stay well on this, let alone participate fully in society. I have done everything I can to cut outgoings. I grow my own vegetables. I don't have a car anymore or ever go on holidays or buy consumer goods, but I don't think I can live at this level.

My home is a very small and modest one of average value for its size and location. The fixed rate mortgage deal I undertook in 2007 was the best available and I was working and could afford it. I have negative equity in the property since house prices fell. I can't sell it easily in the current market and have no where to go that would cost less anyway. I have less than 5 years left before the mortgage capital sum of £125k has to be repaid and no means to repay it since I have had to cancel all insurance/endowment policy payments and reduce to interest only payments in order to live. I could not possibly get a better, or indeed any other, mortgage deal at my age and with my pension level. However I have held on to some hope that if I can maintain this home for 4 more years I may be able to pay off the mortgage capital debt by selling my home and then find rented accommodation suitable for my age without the trauma of huge debt, repossession, and homelessness.

I am now 65 years old and really did work hard all my life in worthwhile jobs as well as bring up my children independently and I paid for my pensions as best I could. The nature of my work was always in the third sector or public sector in caring or public benefit services of one kind or another so did not attract huge financial rewards but I consider it to have been work of value to society anyway and that was always my main motivation. I would be still be working if I could, but unexpected ill health has curtailed that, and though I have been trying hard to find new opportunities to earn again nothing has as yet materialised. Realistically there is not much prospect in the current climate.

I was not forewarned of this by any discussion in the media, or indeed by any forward notice from the Pension Service. The letters received today give me precisely 5 days notice of the change.