Mortgage help whilst on Benefits.

mummyslittleboy

Not sure if this is the right place to post this but if its not please move.

As of October 2010 my friend has been informed that she is going to have to find over £200 a month shortfall on her mortgage payments, she is on Income support with 2 young children, she rang Income support as she was told this when she spoke to her Mortgage lender today and Income support have told her that they dont have any information yet on how it will effect those on benefits but we then found this on Direct Gov website

The standard interest rate used to calculate SMI is currently 6.08 per cent.
From 1 October 2010 the standard interest rate will be set at a level equal to the Bank of England’s published monthly average mortgage interest rate. The starting rate that will apply from 1 October 2010 will be 3.63 per cent (the rate published by the Bank of England on 31 August 2010).

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/On_a_low_income/DG_180321


She has had no warning of this other than from her mortgage lender surely Social security should have given her some sort of written notice.
For her and her family it means they will have to sell and look for somewere to rent as she cannot afford to pay anymore than she already is.

I just wanted to bring this to peoples attention becasue how many others have not been informed.

dmg24

Already posted by woodbine - sadly many people are going to be affected, and as ever the correct information has not fed through to the right people.

anmarj

the dwp have not done it yet, as the systems have not been set for the change, as every case has to be gone through, and I fear that it will only go within the next two weeks or so that people will start getting notice from DWP.

mummyslittleboy

dmg24 wrote: »

Already posted by woodbine - sadly many people are going to be affected, and as ever the correct information has not fed through to the right people.

Woops sorry I couldnt find it thats why I posted it:o

dmg24

anmarj wrote: »

the dwp have not done it yet, as the systems have not been set for the change, as every case has to be gone through, and I fear that it will only go within the next two weeks or so that people will start getting notice from DWP.

It does seem wrong that for a lender to change their rate they would need to give a full month's notice to the individual customer, yet the DWP do not have the courtesy to do this. I don't envy you having to deal with claimants when they realise what is going to happen.

mummyslittleboy wrote: »

Woops sorry I couldnt find it thats why I posted it:o

It has dropped off the first page so you wouldn't see it - I'll suggest to always that we make it a temporary sticky.

andyandflo

Like I have said in my many earlier posts, the government has been subsidising those that have poor credit ratings/and or took out a too high LTV mortgage for far too long. It should not affect those that were responsible enough to put down a substantial deposit, or who didn't borrow more than they should on credit cards etc which resulted in defaults/poor credit ratings.
They would or should be on a more manageable rate of around 4%, and not the 7% rates given to sub prime borrowers!

The alternative is do what we did, either sell up or walk away and hand the keys back. The time has come to distinguish those people that can afford to buy a property and those that should never have done.

savingspender

Oh my god. Can't believe they are going to do this. My ex told me a few days ago that he won't pay his half of the mortgage any more, so I need to find that and this too now. Its just not going to happen. Its going to break my heart because it won't just mean leaving my home but it will mean changing my sons school as there is nothing to private rent in this area and no matter where I rent it will be more than my mortgages payments which is complete craziness!

Also I'm just about to start college but if I have to move area I won't have anyone to look after my eldest until I'm able to get to school to collect him so it literally tips my whole world upside down.

Sorry I know I sound like a moaner and I know I shouldn't have taken anything for granted but if I could have just held on for a year then my youngest is at school, I'd have got my qualification and I'd be able to get a job to support us all and give my chiildren the security of a permanent family home.

andyandflo

savingspender wrote: »

Oh my god. Can't believe they are going to do this. My ex told me a few days ago that he won't pay his half of the mortgage any more, so I need to find that and this too now. Its just not going to happen. Its going to break my heart because it won't just mean leaving my home but it will mean changing my sons school as there is nothing to private rent in this area and no matter where I rent it will be more than my mortgages payments which is complete craziness!

Also I'm just about to start college but if I have to move area I won't have anyone to look after my eldest until I'm able to get to school to collect him so it literally tips my whole world upside down.

Sorry I know I sound like a moaner and I know I shouldn't have taken anything for granted but if I could have just held on for a year then my youngest is at school, I'd have got my qualification and I'd be able to get a job to support us all and give my chiildren the security of a permanent family home.

In which case it may be wiser to 'bite the bullet' now and sell up or hand the keys in and when you are more settled, start saving for a deposit with a regular salary and buy again at a later date.

In the meantime if you are on low income, you will be entitled to help from the council towards the rent. It's not all gloom!

This has been coming for a long time, I handed our keys in a while ago and now rent. That's why I gave up my job and decided to go onto benefits instead. They pay for the accomodation and I don't have any more worries about meeting the mortgage payments each month.

dmg24

andyandflo wrote: »

Like I have said in my many earlier posts, the government has been subsidising those that have poor credit ratings/and or took out a too high LTV mortgage for far too long. It should not affect those that were responsible enough to put down a substantial deposit, or who didn't borrow more than they should on credit cards etc which resulted in defaults/poor credit ratings.
They would or should be on a more manageable rate of around 4%, and not the 7% rates given to sub prime borrowers!

The alternative is do what we did, either sell up or walk away and hand the keys back. The time has come to distinguish those people that can afford to buy a property and those that should never have done.

What you have really said in all of your posts on this matter is I am very bitter because the govt would not help us with our additional lending. This change is going to have a massive impact on lone parent families and the disabled, your unhelpful comments are not welcome.

savingspender wrote: »

Oh my god. Can't believe they are going to do this. My ex told me a few days ago that he won't pay his half of the mortgage any more, so I need to find that and this too now. Its just not going to happen. Its going to break my heart because it won't just mean leaving my home but it will mean changing my sons school as there is nothing to private rent in this area and no matter where I rent it will be more than my mortgages payments which is complete craziness!

Also I'm just about to start college but if I have to move area I won't have anyone to look after my eldest until I'm able to get to school to collect him so it literally tips my whole world upside down.

Sorry I know I sound like a moaner and I know I shouldn't have taken anything for granted but if I could have just held on for a year then my youngest is at school, I'd have got my qualification and I'd be able to get a job to support us all and give my chiildren the security of a permanent family home.

Are you currently paying interest only? If not, it would be worth speaking to your lender about this. There are some schemes which may provide you with a lifeline, I'll find some info for you.

dmg24

Mortgage Arrears or Payment Difficulties

savingspender

There is quite a bit of equity in the house so I will loose my right to any benefits on the sale of the house and will live off that. Just seems very frustrating when I have worked like mad for 10 years to keep the house and then I'm just going to have to give it all up where as others have never worked and have the security of a permanent council house. In my area there is no council list and so we will have to private rent which will give us no gurantee of a permanent home and the rent will be at least a £100 a month more than my mortgage payments.