Support for Mortgage Interest

the_flying_pig

HAMISH_MCTAVISH wrote: »

Oh right....



So how do you propose they do that then?

If not through being "turfed out".

And if they are forced to sell/get repossessed then they don't exactly need SMI....

As per my very first post a release of even part of the average SMI house equity would be enough to pay many years' worth of interest.

Anyway, that's quite enough.

HAMISH_MCTAVISH

Emy1501 wrote: »

The system at the moment encourages people to take out large mortgages without any real thought as to how they will pay the mortgage back if they get into trouble.

Absolutely false.

SMI is limited to 2 years for those who lose their jobs, is only available after 90 days, and is limited to mortgages of less than 200K.

And as is proven by the small amounts paid out, it's hardly encouraged people to take on high mortgages they can't afford to pay.

You can't have it both ways.

Indeed.

HAMISH_MCTAVISH

the_flying_pig wrote: »

As per my very first post a release of even part of the average SMI house equity would be enough to pay many years' worth of interest.

Ah, I see.

You were proposing that banks should be willing to increase the mortgage size of the unemployed, those with serious illnesses, or who had otherwise fallen on hard times.

Good luck with convincing the banks that's a good idea.

Anyway, that's quite enough.

It certainly is.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Ah, I see.

You were proposing that banks should be willing to increase the mortgage size of the unemployed, those with serious illnesses, or who had otherwise fallen on hard times.

Obviously that wasn't the case.

System

It's a novel one, ask people to MEW because they can't afford the mortgage.

the_flying_pig

Joeskeppi wrote: »

It's a novel one, ask people to MEW because they can't afford the mortgage.

it really, really, isn't novel at at all.

it has very obvious similarities to both 'lifetime mortgage' & 'home reversion' equity release schemes.

marginally more difficult administratively than government simply continuing to pick up the tab but cheaper & fairer from a taxpayer perspective.

Le_Chuck

HAMISH_MCTAVISH wrote: »

Absolutely false.

SMI is limited to 2 years for those who lose their jobs, is only available after 90 days, and is limited to mortgages of less than 200K.

And as is proven by the small amounts paid out, it's hardly encouraged people to take on high mortgages they can't afford to pay.



Indeed.

which is a hefty amount of money that is out of limit to a hell of a lot of people. So yes it could be argued it encourages irresponable borrowing

BigAunty

I did come across someone on the benefit forum receiving sickness or disability benefits who claimed to have received SMI for more than 10 years, I think they said they got it for 13 years and house-price inflation meant that they then could buy a decent place outright. As much as I'd love to think it was a troll, they were a long time member with plenty of posts.

HAMISH_MCTAVISH

Le_Chuck wrote: »

which is a hefty amount of money that is out of limit to a hell of a lot of people. So yes it could be argued it encourages irresponable borrowing

Any semblance of "irresponsible borrowing" ended with the credit crunch and the banks swinging too far the other way to where we are today.

And until 2009, SMI only covered up to 100K. So all that borrowing in the boom was done with SMI only covering 100K.

Therefore it's impossible to blame any of that on a 200K limit for SMI.

BigAunty

HAMISH_MCTAVISH wrote: »

Some interesting facts released around SMI. In 2011, the following was the case.

-There were 205,200 claimants with an average claim of £29.84 per week.

-Those on Jobseekers Allowance comprised the smallest number at just 30,000 claimants, but with the largest claims, at an average of £51 per week

...

I am surprised both at how low the number of claimants on JSA is, ...

I think the majority of people on JSA get employment in under 2 years. During discussions of workfare on the Discussion Time forum, someone dug up the statistics on long-term JSA claimants and they are actually tiny in number. I'm trying to recall the numbers of JSA claimants who receive it for 2+ years and I think it's only around 10,000 or so.

I expect the time-limited nature of SMI for JSA claimants really motivates people to get a job.

But there are definately sad posts on the benefit forum from those on JSA or ESA(C) whose 2 years are coming up and they are weighing up their options with the looming expiry of SMI.