URGENT Changes to Morgage Interest Support [merged]

66kaz

i have spoke to the dept of work and pensions and they have said that people who claimed before the change in january 2009 are on the old rules of it being capped at 100,000 so interest only paid to this amount regardless of you owing more on your mortgage which is £69.81 a week.
They also said that people on the new rule are better off as they are getting more paid on the interest but i dont know the new rules as i am under the old rule

just incase this explains it a bit

kaz

DoleMole

janeminder wrote: »

I have just received 2 weeks notification from DWP that the help with mortgage interest they currently give me while on Employment Support Allowance will be reduced from £152 per week to £90.75 per week, as a result of their interest rate being cut from 6.08% to 3.67% from the 28th Sept 2010.

I have always worked as a carer before I became ill. The in surance I had, only lasted 1 year. I am still ill and now disabled and in receipt of Employment Support Allowance and DLA, currently studying at University as a Counsellor part time and I am a single parent of two children age 13. I am stuck in a five year fixed term mortgage contract which I entered into before I became ill in 2008, which is currently £700 per month rising to £800 in July 2011, ending in 2013. The penalty to get out of this contract is £5,631. The DWP have been paying £152 per week toward my mortgage interest and I have been paying £91 per month to make it up to the required amount. This cut has resulted in a dramatic shortfall of £336 which I cannot find! And I am stuck in a poverty trap.I have contacted my Building Society the Halifax, who said my options were:
My mortgage is a ‘part and part’ mainly interest only mortgage and the only help they could offer was to reduce my payment by £20 per month. I could swap the mortgage I am on for another and a different rate, but I would have to pay penalties of £5,631.00 upfront and an arrangement fee of £999.00. No other help was available as I had already had a mortgage break when I first became ill. They also used index linked valuation of £169,000 so I cannot borrow on my equity as I would need to have 25% equity in my home for the 3% tracker, which would be ideal. They said to do this it would be at a charge of £200 for a valuation and this was no guarantee. Fees would still apply . My house has been up for sale for 1 year, with little interest and I have since dropped the price by £15,000.

This cut is going to affect many vulnerable people on benefits all with mortgages, resulting in repossessions and homelessness. My fear and reality is we could loose our home as soon as Christmas as there is no way I can find the shortfall in payments. We have lived in our home 15 years and have done a lot of work and spent a lot of money over the years on our home.
If I do sell then I probably won’t get another mortgage as they have tightened up on lending. I will have to rent or go into a static caravan if there is enough profit. The ideal situation would be for The Mortgage Rescue Scheme to buy my house and rent it back to me to lessen the stress of moving and enable us to keep our home, but my house is valued above what they will allow in this area. But the government are apparently axing that soon too! The Halifax could change my product to an affordable amount, but they wont without charges.

If im going down, im not going down quietly. Im hopefully appearing on TV and in the news papers. People affected need to fight and make some noise otherwise the government will get away with this and we will all loose our homes!

I feel so ill with all this. Its hard trying to keep well with this extra pressure on top of the usual pressures being on benefit. At least I am making an effort to secure future work by re-training into something I will manage now im disabled.

At least when Thatcher did this she did it for new claims not to people all ready trapped by circumstances.

As quoted by Chris Greyling ‘Helping people escape severe hardship was a ‘key challenge; not to leave the most vulnerable people behind.’" And cut mortgage interest support to ensure its better targeted.

Rubbish! :mad:

Hi there, I fully sympathise with you

Their pulling the carpet away from us in too quick a fashion

We would actually would be costing more in benefits per month if we were renting.

If I do not find the payments then I will sell and a lot of equity released. shall I spend this all on a cruise

and then return and claim full rent allowance and all benefits (which I do not do at moment).

The fact that I have not been informed directly by my mortgage provider and the DSS have only hinted of the change of mortgage
by moving my signing day, hence they then send the brown envelopes telling of a general change, and not stating exactly of the
reduction.

I think this has not hit into people who are claiming this benefit yet, over 200,000, and there has been not that great a response to this forum shows their unaware.

Thanks for writing

Broken_hearted

DM I would expect the response to these changes to hit the forums in November/December time as people find out they are being hit. Most people will be able to withstand one months payment, then the arrears ball will start rolling dragging a lot of people down with it.

TOBRUK

I was aware of the cut since the June budget announcement but had forgotten all about it until I came across this thread. I still haven't received a letter from the DWP about the change in my payments (which I think they should have done by now) - I have an idea of how much the shortfall will be. Next payment to be made to the lender by DWP is expected on 1st October, so I shall phone my lender up on that afternoon to see what amount they have paid.

Brokenhearted, as you have said, many will not be aware yet, especially if they haven't received a letter! The mortgage lenders will not be notified by the DWP of the shortfall and will only notify the customer when they are in arrears.

[Deleted User]

as the payments are made in ARREARS then a payment due on 1st october will still be at the old rate,it will be the next payment that will be reduced and perhaps thats why you havent been informed yet what it will be

TOBRUK

Thank you woodbine, ofcourse payment is in arrears! I feel so stupid now!:o

Hump

If the SMI rate change means it is likely you will lose your home then alongside all the advice given above then consider contacting your local authority for advice around 'mortgage rescue'

All local authorities were given 'mortgage repossession prevention' funds last year to provide interest fee loans of upto £3k (exceptionally £5k) to prevent homeowners being repossessed. They may still have funds available.

Then the much hyped 'government mortgage to rent' and 'equity loan' schemes are still running - the former takes you out of home ownership (loan to value of 75 - 120% - allowing people with negative equity to apply), the latter is for people with more equity and replaces part of the mortgage with a low rate loan.

Rumour is the current schemes will finish by the end of March - so hurry up and ask....

LittleTinker

mitchaa wrote: »

If I take out a £150k mortgage today, it is likely I'll pay £300k back with interest. In 25yrs time the house may have trebled in value so I have made a profit of £150k in growth over 25yrs.

If you take out a £150k mortgage today and become disabled tomorrow. You pay £150k back and at the end of the 25yr term you have made a profit of £300k in growth over 25yrs.

With the 6.08% payments over the last few years and the low interest rates that the majority of people will have been put onto, aswell as getting the interest portion paid off in full, a portion or perhaps all of the repayment part was getting paid off aswell. So you may only pay £75k out of your own pocket, compared to the £300k I have to pay to have the same £450k house at the end of it in 25yrs time.

How is that fair? No wonder the country is skint, I wish the government paid off my mortgage for me.

Not all, but certainly a great number of those receiving ISMI can work but for reasons unbeknown they choose not too. I have a friend who is classed as disabled as he only has 1 foot. He gets high rate mobility and middle rate care and will do for the rest of his life but yet he can easily work if he wanted too, sit in a call centre, become a driver, a whole host of jobs are available to him but he doesn't need to as he can hide behind the benefits system. (Trust me, he can walk for miles on his prosthetic limb as I go golfing with him every couple of months)

He could potentially get a job tomorrow, sign up for a £200k mortgage, pack in the job a few weeks later and get the government to pay off his mortgage for him, (Or a great portion anyway 50%+) In 25yrs time, he can sell the house and bank all the profit courtesy of the hard working taxpayer.

The system is very unfair and should be time limited to 3-5yrs maximum in my opinion.

The government will be paying someones mortgage though, most of the time.

If I lost my job then found that I would also lose my house, where do you think I would live?
I would, more than likely, find a house to rent in the same area and that rent is likely to be a bit more than what my mortgage was.

That rented property is owned by someone......so instead of the government paying the mortgage of some property tycoon, isnt it better to pay the interest of the mortgage of the people who are unable to work directly?

Also, just to point out...not all disabled people are 'just' disabled....some of them are ill too. Yes, you can go to work if you have one foot missing...if there is nothing else wrong.....but its a different kettle of fish if you are ill too.

Daaisy

Just wanted to mention that it is worth checking with your building society to see if you are in fact "in credit" with your building society mortgage account.

It may mean you have a bit more time

My building society told me that i have accrued a credit of £600 because of the interest being paid by government being higher than interest charged by my building society

And no i dont agree that its right, i'd rather the government had paid the actual interest owed instead of putting us all in the situation we are in now !!!!!

Hope this is of some help to someone

Daaisy xx

lurkerlurk

Apparently ESA claimant who are paid ESA(C) at the same rate as ESA(IR) should never have been paid SMI.

Waiting to see if people currently being paid will now have this withdrawn.