Mortgage help whilst on Benefits.

TOBRUK

dmg24 wrote: »

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.

Well said dmg24, many people will be in big trouble and insensitive comments at this time is certainly not helpful and definitely not welcome.

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!

Yes andyandflo, I am one who has help and receives SMI payments. I was not irresponsible when buying my house, never had poor credit rating, I have no balance on my credit card etc. I bought my house when I was in a very good job and worked hard but then became ill and disabled and was no longer able to work!


I didn't know about this cut in rate due to begin next month until I read it on here earlier on another thread. The problem is that the department dealing with mortgage payments do not inform the mortgage lenders and I'm sure that if they let us who receive SMI know it will probably after the event.

In the meantime extra payments will not be made to the lender who will then inform people that they are in arrears! I shall be checking with the department tomorrow to see exactly how much they will be paying the lender next month so that I am prepared! At least in my case I have a small mortgage compared to some, but I feel sorry for all those who will not be able to cope.:(

The people that are renting though will have a shock soon as they will be cutting housing benefit and the amount of rent they will allow!

dmg24

tcr wrote: »

This change was signalled in the Budget. The statutory instrument to amend the SMI was laid before Parliament on 20th July and that's the date it became public. The statutory instrument says that the new SMI rate will be average mortgage rate as published by the Bank of England in August 2010.

Bank of England published that average mortgage rate on 31/08/10 and DWP made their announcement on 03/09/10. Now their staff have the task of reassessing tens of thousands of claims to tell people exactly how that change affects them.

It's not DWP's "lack of courtesy" ... it's the way the statutory instrument is worded.

I am aware when the change was announced, it was me that first posted about it on MSE.

It is discourteous of the DWP to give so little notice to individual claimants. Whilst those of us with an active interest in the topic will keep on top of developments, a severely disabled person cannot be expected to do so, and deserves the courtesy of being personally informed of such a change well in advance of the change occurring.

[Deleted User]

I think alot of people have to keep this change in context,ok on a 100k mortgage we`ll all need to find £50 a week extra,but on a 20k mortgage that will reduce to £10 a week.
One of the biggest dangers is for people on jsa who have had smi limited to 2 years,come january 2011 some will have their smi stopped dead.
And people talking about selling up and renting should bear in mind that LHA doesnt always cover ALL your rent(depending on number of people/number of bedrooms/cost of rent)

dmg24

andyandflo wrote: »

They will anyhow as she will have to carry on paying the mortgage until it is sold irrespective whether she sells it herself or the bank sell it.

It is far from ideal for us too! (I'm 62 and my wife is 66 and both in bad health). I accept that we may have to keep moving every 6 months or so, it is just one of those things that goes with private renting.
But at least there is financial help towards the rent!

You are tying yourself up in knots here - just a few posts ago you insisted that giving up the house was a positive step, as it would not affect someone's credit rating and you could simply move to a rented property. Now you admit that it will screw up your credit rating and renting is far from ideal. Do you actually think before you post?

[Deleted User]

TOBRUK wrote: »

Well said dmg24, many people will be in big trouble and insensitive comments at this time is certainly not helpful and definitely not welcome.

Yes andyandflo, I am one who has help and receives SMI payments. I was not irresponsible when buying my house, never had poor credit rating, I have no balance on my credit card etc. I bought my house when I was in a very good job and worked hard but then became ill and disabled and was no longer able to work!


I didn't know about this cut in rate due to begin next month until I read it on here earlier on another thread. The problem is that the department dealing with mortgage payments do not inform the mortgage lenders and I'm sure that if they let us who receive SMI know it will probably after the event.

In the meantime extra payments will not be made to the lender who will then inform people that they are in arrears! I shall be checking with the department tomorrow to see exactly how much they will be paying the lender next month so that I am prepared! At least in my case I have a small mortgage compared to some, but I feel sorry for all those who will not be able to cope.:(

The people that are renting though will have a shock soon as they will be cutting housing benefit and the amount of rent they will allow!

the additional cost to you should work out at approx £24 per thousand outstanding per year,or £240 per 10,000
but keep in mind that the dwp pay every 4 weeks and most mortgages are 12 payments a year not 13

shegar

andyandflo wrote: »

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.

andyandflo wrote: »

Why?
The house hasn't been re-possessed so it won't be on that register. Nor will it affect her credit rating because everything will be cleared with no outstanding debts before she gets the balance of the equity.
If there is no equity then there is no difference if she sells it herself, as she would still be responsible for the shortfall and that would appear on her credit file.

I know the house hasnt been re posessed , but the OP will not be able to make her monthly payments as she agreed to do , each month your credit file is up dated , the mortgage company will enter this that she hasnt kept up with the agreed payments, hence ,when she trys to borrow again this will come up. No company will lend to anyone that as mortgage arrears or CCJs , which she will get if she defaults payments.....

savingspender

I don't want to be on income support any longer than I need to be so although I will get help with rent while I am in this situation when I am back to work I will be worse off because the rent will be more than my mortgage. I wanted to ideally get myself into a situation where I'm not reliant on state help so that if tax credits etc are cut my children don't suffer.

My ability to do that was really reliant on me being able to stay with the support network of friends I have, take me away from here and it makes it near on impossible and my children will only really have me have me as my ex moved an hour away. So for me just giving back the keys it not an easy option at all.

Thanks dmg24 and shegar for your understanding of my situation.

anmarj

TOBRUK wrote: »

I didn't know about this cut in rate due to begin next month until I read it on here earlier on another thread. The problem is that the department dealing with mortgage payments do not inform the mortgage lenders and I'm sure that if they let us who receive SMI know it will probably after the event.

In the meantime extra payments will not be made to the lender who will then inform people that they are in arrears! I shall be checking with the department tomorrow to see exactly how much they will be paying the lender next month so that I am prepared! At least in my case I have a small mortgage compared to some, but I feel sorry for all those who will not be able to cope.:(

the department can't tell you at present as the change has not gone through, till that is done they will not be able to say, which is what dmg said earlier, most lenders do appear to know as people are coming on saying that their lender has been in touch, it may be that letters were sent to the lenders to warn them, and so some are already making the change, but in terms of the DWP no changes have gone through, we have not had any noficiation and knowing this, it will be at the last minute

tcr_3

dmg24 wrote: »

I am aware when the change was announced, it was me that first posted about it on MSE.

It is discourteous of the DWP to give so little notice to individual claimants. Whilst those of us with an active interest in the topic will keep on top of developments, a severely disabled person cannot be expected to do so, and deserves the courtesy of being personally informed of such a change well in advance of the change occurring.

How do you expect DWP to advise people if the the new SMI rate wasn't published by the Bank of England until 31/08/10 ? DWP couldn't act until that rate was published ... because that's what the statutory instrument said.

Now they've got to get their systems updated with the new rate, most cases will be lettered over the next couple of weeks, those which fall through the net will have to be dealt with by hand.

Each office only has a couple of mortgage staff, half a dozen at most. I think you're hugely uncharitable if you expect them to be able to reassess tens of thousands of cases with such limited resources and in such a short timescale too.

TOBRUK

woodbine wrote: »

the additional cost to you should work out at approx £24 per thousand outstanding per year,or £240 per 10,000
but keep in mind that the dwp pay every 4 weeks and most mortgages are 12 payments a year not 13

Thank you woodbine for your trouble and giving me those figures although I'm afraid I can't work it out at the moment - I may attempt it later! I have just under £40,000 left on my mortgage.

I am aware that the dwp pay every 4 weeks (in arrears) making 13 payments a year. I phone the lender every couple of months to check that payments have gone through and that I am not in arrears.

anmarj wrote: »

the department can't tell you at present as the change has not gone through, till that is done they will not be able to say, which is what dmg said earlier, most lenders do appear to know as people are coming on saying that their lender has been in touch, it may be that letters were sent to the lenders to warn them, and so some are already making the change, but in terms of the DWP no changes have gone through, we have not had any noficiation and knowing this, it will be at the last minute

Thank you for the information anmarj, although I really think it is terrible that the department isn't given this information way ahead of time - allowing to give people plenty of notice!