Will we lose our home?

poormummy_3

Desperately looking for some helpful information about mortgage interest benefit payments and some advice about my situation - no-one seems to know - not the bank, the job centre, social worker, CAB...

Partner and I have been on JSA for 18 months and have been receiving mortgage interest benefit, and although this only covers part of our mortgage payments, it has kept the bank off our backs (they wouldn't change us to an interest-only mortgage).

The mortgage interest benefit has been cut quite considerably in the past few months, so it doesn't cover the interest payments any more. The bank however, said they may take legal action against us if we owe 6 full months mortgage payments - and so far altogether, we owe 5 months full payments.

We haven't been eligible for the Mortgage Rescue Scheme. We would have liked our house to be bought by our local authority and rented it back from them, but we would only be eligible for this if the bank gave us a notice of reposession. And the bank won't give us a notice of reposession because we have been paying some money towards our mortgage from the mortgage interest benefit.

As far as I am aware the mortage interest benefit will be paid for 2 years - so come January, I guess we will have our house repossessed.

From the information we have been given, if we were to sell our house (as per bank's suggestion) any money that was made on the house would have to be used to pay for private rent - we wouldn't be eligible for housing benefit as we would have made ourselves intentionally homeless. So we would lose our house and wouldn't be able to use the money to pay off our debts (over £25k). So it would seem that even selling up wouldn't solve our financial difficulties.

Would it help if I claimed ESA instead of JSA?

I feel stuck in limbo and have done for the past 18 months. No-one can suggest a way out or a way for us to keep our home. It seems we may have to wait until we get our house repossessed at some point and then keep our fingers crossed as we see what happens.

poormummy_3

Unfortunately I suffer from severe depression so am unable to work, so my partner has to do the childcare when I'm not in a fit state. Also, his industry hasn't picked up from the recession and there are no jobs in his field. So really JSA isn't the right benefit for us to be on, I think I should be on ESA, but don't know how this would affect the mortgage interest benefit payments, so we haven't switched.

DaisyFlower

Yo could use childcare and he could look for a job in a different field, in your circumstances one of you needs to work.

Jowo_2

Have you tried speaking to Shelter? They have a home owner helpline.

http://england.shelter.org.uk/get_advice/repossession/mortgage_arrears

Here Shelter has some info on the mortgage rescue scheme that you speak of. One of the criteria for eligibility is a bit vague - i.e. "are considered to be vulnerable for other special reasons." Is that what you are hoping the ESA will prove?

"If you are considering this option, you can contact Shelter's homeowner helpline on 0300 3300 515 for an initial assessment. We can help you make an application to your local council."


http://england.shelter.org.uk/get_advice/repossession/mortgage_arrears/government_mortgage_rescue_scheme

Caz3121

poormummy wrote: »

we wouldn't be eligible for housing benefit as we would have made ourselves intentionally homeless. So we would lose our house and wouldn't be able to use the money to pay off our debts (over £25k). So it would seem that even selling up wouldn't solve our financial difficulties.

I don't thing selling your house would make you ineligible for housing benefit itself. It may affect being rehoused by the council.
However if you have more than £16k from the sale then you would not be able to claim any means tested benefits (and you cannot decrease your cash by paying off non-priority debts - eg credit cards)

How much equity do you have in the property?

silvercar

Caz3121 wrote: »

I don't thing selling your house would make you ineligible for housing benefit itself. It may affect being rehoused by the council.
However if you have more than £16k from the sale then you would not be able to claim any means tested benefits (and you cannot decrease your cash by paying off non-priority debts - eg credit cards)

How much equity do you have in the property?

Totally agree with this.

The classification of intentionally homeless is used to decide that the council do not have an automatic obligation to rehouse you.

The money from the sale is also an issue that would effect benefit entitlement -though by the sound of it SMI will anyway stop soon. If any of your other benefits are means tested they would go if the sale of the house put money in your bank account.

poormummy_3

Thank you for all your replies.

My thoughts about changing to ESA are because it would seem that by claiming this benefit, the mortgage interest payments don't stop after 2 years.

Although maybe it would be for the best that the payments did stop, then the bank could start legal proceedings and we would then be eligible for the mortgage rescue scheme. Having a dependent child and mental health problems will 'help' us be a priority, but we need the letter from the bank before we can apply.

I can see that selling our house would be an option and we could live off any equity (maybe £20k-£30k) until we could claim housing benefit, it just feels like we are being punished for being made redundant (and the whole financial mess and insecurity triggered the depression). It would feel bad enough having to lose our home to use the money to pay off debts that we can no longer afford to pay back, let alone having to lose our home to use the money to pay someone else's mortgage while renting. Once we lose our house, we'll never be able to afford to get another, and have to be back renting forever. Then what happens when we retire?

I just wish there was another way, something I haven't yet considered.

dmg24

poormummy wrote: »

Thank you for all your replies.

My thoughts about changing to ESA are because it would seem that by claiming this benefit, the mortgage interest payments don't stop after 2 years.

Although maybe it would be for the best that the payments did stop, then the bank could start legal proceedings and we would then be eligible for the mortgage rescue scheme. Having a dependent child and mental health problems will 'help' us be a priority, but we need the letter from the bank before we can apply.

I can see that selling our house would be an option and we could live off any equity (maybe £20k-£30k) until we could claim housing benefit, it just feels like we are being punished for being made redundant (and the whole financial mess and insecurity triggered the depression). It would feel bad enough having to lose our home to use the money to pay off debts that we can no longer afford to pay back, let alone having to lose our home to use the money to pay someone else's mortgage while renting. Once we lose our house, we'll never be able to afford to get another, and have to be back renting forever. Then what happens when we retire?

I just wish there was another way, something I haven't yet considered.

The solution has been given to you - your husband needs to widen his job search and get a job.

paddedjohn

dmg24 wrote: »

The solution has been given to you - your husband needs to widen his job search and get a job.

Totally agree with this, 18 months is long enough on handouts, time to go back to work.

poormummy_3

I didn't come on here for a benefit bashing :eek: but some open-minded empathy and friendly advice to help me out of a serious predicament. I would not choose a life of poverty and humiliation by being on benefits.

Of course, if life were that simple my husband would have got a job 18 months ago and we wouldn't be in this situation. He has been the full time child carer while I have been sick.

Even if I were well enough to care for my son on my own full time (or care for myself for that matter), one income would never cover all our outgoings, even if he were to earn the money he was on before being made redundant - and certainly wouldn't cover any childcare. There are no other well paid jobs around that he is qualified for (and the government no longer offers payment towards training for long-term unemployed).

I feel we are stuck, and feel our situation is hopeless. The simple 'get a job' advice just doesn't solve all the issues.

PasturesNew

The house is holding you back. Sell it, rent. Get a fresh start without trying to hold onto yesterday's life. You might be able to buy again in the future.... I didn't buy until I was 40, I bet you're younger than that. I then couldn't afford to run it, so let it go as it was holding me back and clouding every other thought.... I'll buy again one day in the future.

The house is your prison; free yourself.