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MSE News: Support for mortgage interest benefit cut by thousands

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  • poppy10_2
    poppy10_2 Posts: 6,588 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    edited 30 September 2010 at 9:48PM
    mbeast wrote: »
    Payments towards a Mortgage if unable to work is not the same as payment to someones rent.
    Well, exactly. As a renter, if I were to lose my job, I would get absolutely no help towards paying my rent, unlike you who will still get your mortgage interest paid by the government even after this cut. I would have no options other than to be evicted by my landlord and rehoused by the council in the "grotty council estate" you seem to fear so much. Why is that fair?
    poppy10
  • mbeast
    mbeast Posts: 54 Forumite
    poppy10 wrote: »
    Well, exactly. As a renter, if I were to lose my job, I would get absolutely no help towards paying my rent, unlike you who will still get your mortgage interest paid by the government even after this cut. I would have no options other than to be evicted by my landlord and rehoused by the council in the "grotty council estate" you seem to fear so much. Why is that fair?

    are you not reading my post?
    as a renter I and indeed yourself would get housing benefit, in my case I'd be entitled to £110 per week but as I have a mortgage I'll only get £60-70.
    It is because of this that I posted on this topic about the rate of help being given dropping as it means many like myself will end up homeless / in temp housing where as if I was renting my house at the same cost as my mortgage payments I would not.

    on a side note as a renter you get help from day 1 of losing your job, as a owner you should at least have payment protection in place that pays the 1st year before any other help is offered, If not then you still have to wait awhile which I'm sure someone else mention how long but I had P.P for a year and savings to cover the 1st 60 days before P.P even starts paying in my case.
  • mbeast wrote: »
    are you not reading my post?
    as a renter I and indeed yourself would get housing benefit, in my case I'd be entitled to £110 per week but as I have a mortgage I'll only get £60-70.
    It is because of this that I posted on this topic about the rate of help being given dropping as it means many like myself will end up homeless / in temp housing where as if I was renting my house at the same cost as my mortgage payments I would not.

    on a side note as a renter you get help from day 1 of losing your job, as a owner you should at least have payment protection in place that pays the 1st year before any other help is offered, If not then you still have to wait awhile which I'm sure someone else mention how long but I had P.P for a year and savings to cover the 1st 60 days before P.P even starts paying in my case.


    I am not aware of any plan in place to help renters if they lose their job??
    I have been in the insurance industry for the past 6 1/2 years (protection products)


    We have now bought our first home :j(completion date - 23.07.2010)

    Wedding budget: £2,000 so far spent: £1,850. Wedding date of 27.08.2011 :T
  • mbeast
    mbeast Posts: 54 Forumite
    I am not aware of any plan in place to help renters if they lose their job??
    Any one on a low income or benefits can claim housing benefit towards their rent and coucil tax benefit to help pay that.
    To find out the amount of help you would get it is worth contacting your local council or citizens advice bureau.

    Hopefully you wont find yourself in need to and have many years of happy employment :D
  • InMyDreams
    InMyDreams Posts: 902 Forumite
    Part of the Furniture 500 Posts Name Dropper
    mbeast wrote: »
    as a renter I and indeed yourself would get housing benefit, in my case I'd be entitled to £110 per week but as I have a mortgage I'll only get £60-70.

    As harsh as it is, and I'll probably get shot down in flames, looking at it objectively and from outside of the situation, paying rent *is* different to paying a mortgage.

    Rent is a payment to put a roof over your head. This is a basic human need and it is right that as a civilised society we should support those who have little or no means to provide this for themselves.

    A mortgage is a debt you have chosen to take out in order to buy something. This is not a basic human need. You are not paying for a roof over your head, but for money that you have borrowed and spent on yourself. (The fact that is is secured on your purchase is simply the banks way of ensuring as best they can that they will get their money back.) Granted, this has the hugely advantageous consequence of you living rent-free. But this is at a price. A huge gamble that is pointed out very clearly when you take out the mortgage. What you are *not* buying (unless you pay extra for it) is security. It may well be that at the time it was a sensible gamble for you to take, but it was still a gamble and it has not paid off.

    This is one of the reasons that rent money is not 'dead' money and that buying a house should not be seen as automatic 'security' for your family. Quite the opposite. If you can't afford the debt repayments then it's only fair that you should give back the money.

    I can well understand the frustration of those who rent. Maybe if those who can't afford their mortgages were forced to sell up (as they agreed would happen when they took out the mortgage) the effect on the housing market would mean that more affordable housing was available for all.

    I do understand your plight and can see that it seems like it would be more cost-effective for the state to cover your debt obligations, but in doing so, are they not artificially propping up the market, making it housing benefits more expensive for them in the long run?

    Looking at it compassionately (rather than objectively) I can see that you do deserve support, but I don't think you have an automatic 'right' to support at the same level as someone who rents and hasn't risked their financial security in the hope of making huge gains in the future that they can subsequently also pass down to their children. That's just not fair.
  • mbeast
    mbeast Posts: 54 Forumite
    InMyDreams wrote: »
    As harsh as it is, and I'll probably get shot down in flames, looking at it objectively and from outside of the situation, paying rent *is* different to paying a mortgage.

    Rent is a payment to put a roof over your head. This is a basic human need and it is right that as a civilised society we should support those who have little or no means to provide this for themselves.

    A mortgage is a debt you have chosen to take out in order to buy something. This is not a basic human need. You are not paying for a roof over your head, but for money that you have borrowed and spent on yourself. (The fact that is is secured on your purchase is simply the banks way of ensuring as best they can that they will get their money back.) Granted, this has the hugely advantageous consequence of you living rent-free. But this is at a price. A huge gamble that is pointed out very clearly when you take out the mortgage. What you are *not* buying (unless you pay extra for it) is security. It may well be that at the time it was a sensible gamble for you to take, but it was still a gamble and it has not paid off.

    This is one of the reasons that rent money is not 'dead' money and that buying a house should not be seen as automatic 'security' for your family. Quite the opposite. If you can't afford the debt repayments then it's only fair that you should give back the money.

    I can well understand the frustration of those who rent. Maybe if those who can't afford their mortgages were forced to sell up (as they agreed would happen when they took out the mortgage) the effect on the housing market would mean that more affordable housing was available for all.

    I do understand your plight and can see that it seems like it would be more cost-effective for the state to cover your debt obligations, but in doing so, are they not artificially propping up the market, making it housing benefits more expensive for them in the long run?

    Looking at it compassionately (rather than objectively) I can see that you do deserve support, but I don't think you have an automatic 'right' to support at the same level as someone who rents and hasn't risked their financial security in the hope of making huge gains in the future that they can subsequently also pass down to their children. That's just not fair.

    I agree on many points but I did buy the house to put a roof over my head and I would only like help towards the interest part of the payments, the other part I will pay myself ether through struggling on less to spend on other things or changing the mortgage to interest only until I am able to restart paying the whole of the loan.

    Shame that to my knowledge there is no payment protection that covers for longer that 1 year that seems the norm so those of us that find ourselves out of work or on a lower wage can protect ourselves untill we are able to re meet the full payments at least then we could protect our homes for longer or chose not to pay the higher level of payment protection and take a big gamble on if we can make every payment until completion.

    I believed that with the savings I had and the payment protection level would be sufficient but unfortunately it was not.

    Still I'm grateful I do get some help to cover some of my shortfall but I think it strange that the reason for the government change in mortgage interest help has drop to a level lower than rent allowance which in my case would cost them more when a fair few including myself now will most likely end up getting a higher level of help to pay rent which is for the same purpose of keeping a roof over our heads.
  • mbeast wrote: »
    I agree on many points but I did buy the house to put a roof over my head

    But you didn’t have to. No one forced you. You could have rented which would have been safer. You chose to buy because you believed the returns would be greater in the long run. That's not make any judgement on whether at the time this was a wise decision or not. No one has a crystal ball.
    mbeast wrote: »
    and I would only like help towards the interest part of the payments, the other part I will pay myself ether through struggling on less to spend on other things or changing the mortgage to interest only until I am able to restart paying the whole of the loan.

    That is no different to getting help towards the interest of any unsecured debt should you fall onto tough times. But at least with a secured debt, you have the option of selling the house and paying (at least some of) the money back. This is generally not even an option for unsecured debt. Why should you not have to pay the interest on money you have borrowed?
    mbeast wrote: »
    Shame that to my knowledge there is no payment protection that covers for longer that 1 year that seems the norm so those of us that find ourselves out of work or on a lower wage can protect ourselves untill we are able to re meet the full payments at least then we could protect our homes for longer or chose not to pay the higher level of payment protection and take a big gamble on if we can make every payment until completion.


    But you did know this before you took on the mortgage. You still chose to go ahead. This forum is full of would-be buyers who refuse to listen to these very real risks, thinking that if others can buy a house they so can they. The more they see people with mortgages doled out of trouble, the more they don’t believe the risks, the more they are prepared to pay for their house because they feel the states owes it to them to dole them out.
    mbeast wrote: »
    I believed that with the savings I had and the payment protection level would be sufficient but unfortunately it was not.

    I really do feel for you. It is sickening to have worked hard all your life and feel like you have had the rug pulled out from under you and your family. And to see other people who you see as less deserving getting more assistance than you.
    mbeast wrote: »
    Still I'm grateful I do get some help to cover some of my shortfall but I think it strange that the reason for the government change in mortgage interest help has drop to a level lower than rent allowance which in my case would cost them more when a fair few including myself now will most likely end up getting a higher level of help to pay rent which is for the same purpose of keeping a roof over our heads.

    As I suggested before though, helping people with rent is not propping up the over-inflated housing market that is partly responsible for causing so many problems in the first place. From the state’s point of view, looking at it long term, paying someone an amount towards their rent must be more cost effective than paying someone the same towards their mortgage.
  • mbeast
    mbeast Posts: 54 Forumite
    InMyDreams wrote: »
    From the state’s point of view, looking at it long term, paying someone an amount towards their rent must be more cost effective than paying someone the same towards their mortgage.

    I agree with the rest but this is the part I find hard to understand.

    In my case it will cost them more to pay towards a rented house for me than it would to help me towards my mortgage to help save me moving, even more so when from what I've heard that there is a grant to help with moving cost as well.

    If it was me paying, I'd rather pay someone in the same situation £100 towards their mortgage than pay them £110 towards renting somewhere else per week and pay them to move as well.
  • MissMoneypenny
    MissMoneypenny Posts: 5,324 Forumite
    edited 2 October 2010 at 1:52AM
    mbeast wrote: »
    Shame that to my knowledge there is no payment protection that covers for longer that 1 year

    There are insurance poilicies you can get to replace a proportion of your salary if you are ill, without a timeline. Somone I know had one: well had one until the insurance company put PIs and camera on her and caught her out.
    mbeast wrote: »
    I think it strange that the reason for the government change in mortgage interest help has drop to a level lower than rent allowance

    The house prices and rents (LHA) were both pushed up by the last government. The rents (LHA payments) will be dropping in April.
    mbeast wrote: »
    If it was me paying, I'd rather pay someone in the same situation £100 towards their mortgage than pay them £110 towards renting somewhere else per week and pay them to move as well.

    They won't pay you to move.

    As there is only going to be a shortage of about £40 a week (about £6 per day) on your mortgage, there must be some job that you or your wife could do to find that money?
    RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
    Read the sticky on the House Buying, Renting & Selling board.


  • mbeast wrote: »
    Any one on a low income or benefits can claim housing benefit towards their rent and coucil tax benefit to help pay that.
    To find out the amount of help you would get it is worth contacting your local council or citizens advice bureau.

    Hopefully you wont find yourself in need to and have many years of happy employment :D


    Let's hope so lol!
    I have been in the insurance industry for the past 6 1/2 years (protection products)


    We have now bought our first home :j(completion date - 23.07.2010)

    Wedding budget: £2,000 so far spent: £1,850. Wedding date of 27.08.2011 :T
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