Summer Budget 2015 : SMI changes, support for mortgage interest.

Confuseddot

FBaby wrote: »

Then it is their error to believe that because they got on the property ladder it meant them being homeowners forever. It doesn't work this way but as it's been mentioned already, you have a much better chance of staying so if you bother to take mortgage protection insurance when you take your mortgage out. Why people don't is beyond me.

Probably because they have pre existing health conditions and to cover them all it was crippling expensive.

Confuseddot

missbiggles1 wrote: »

In those circumstances, surely you'd just move somewhere cheaper?

In some cases easier said than done. One of the biggest obstacles of selling is negative equity. If you are lucky enough to make some profit but not enough to buy somewhere outright you are a bit stuck. No chance of mortgage as no job. Hard to get private rental as no job and no references etc

If you are getting the SMI due to sickness benefits it could be difficult to move especially if you are established with the health professionals in your area.

Confuseddot

rogerblack wrote: »

To raise a related matter.
On UC, previously, there has been a very, very nasty cliff-edge where someome was getting SMI - if they earned one pound, all their SMI will stop.

Does this 'loan' function in the same way - or can you still be paid it even though earning a low wage?

That would be good but can't see it working like that.

Confuseddot

Wonder how this long will be treated on your credit file and can it be paid off early ?

How much interest is going to be applied ?

Seems a bit harsh if you fall ill early in life and have SMI paid for a few years but then go on to work and pay off your mortgage but have this loan accumulating interest until you sell your house in the 80s.

I dosen't seem fair to be paying off peoples mortgages but then this doesn't seem all that fair either especially when a lot of the SMI payments are less the LHA so actually saving tax payers money.

[Deleted User]

FBaby wrote: »

Then it is their error to believe that because they got on the property ladder it meant them being homeowners forever. It doesn't work this way but as it's been mentioned already, you have a much better chance of staying so if you bother to take mortgage protection insurance when you take your mortgage out. Why people don't is beyond me.

not everyone can get cover and even if it does pay out its usually for 12 months at the rate insured

bloolagoon

Confuseddot wrote: »

Wonder how this long will be treated on your credit file and can it be paid off early ?

How much interest is going to be applied ?

Seems a bit harsh if you fall ill early in life and have SMI paid for a few years but then go on to work and pay off your mortgage but have this loan accumulating interest until you sell your house in the 80s.

I dosen't seem fair to be paying off peoples mortgages but then this doesn't seem all that fair either especially when a lot of the SMI payments are less the LHA so actually saving tax payers money.

The interest rate is very low and it can be laid back at any time. So if you were out of work for say 18 months then you can pay it back in instalments when you start work again. The outstanding interest accrues until repaid.

I would rather have this option temporarily than lose my home.

If you are long term sick then it would only happen when you sold - given that many may need care costs it would wipe it out anyway.

The only losers are those who wish to claim long term and leave an inheritance.

bloolagoon

woodbine wrote: »

not everyone can get cover and even if it does pay out its usually for 12 months at the rate insured

Anyone can get it - and yes mine is only 12 months unemployment but it's until retirement for ill health.

My unemployment is £13 pm to cover £1430 pm and unemployment/ sickness is £47 for OH. That covers 4k per month payment (I don't have myself on sickness due to cancer and high premiums)

bloolagoon

Confuseddot wrote: »

In some cases easier said than done. One of the biggest obstacles of selling is negative equity. If you are lucky enough to make some profit but not enough to buy somewhere outright you are a bit stuck. No chance of mortgage as no job. Hard to get private rental as no job and no references etc

If you are getting the SMI due to sickness benefits it could be difficult to move especially if you are established with the health professionals in your area.

But then there is no loan - the equity needs to exceed loans including the mortgage

Confuseddot

bloolagoon wrote: »

But then there is no loan - the equity needs to exceed loans including the mortgage

I was refer to the poster who said that people should just move to cheaper area and why this wasn't always possible.

If you do sell yes you won't have no loan, but won't have a home and probably no hope of ever getting one again.

Confuseddot

bloolagoon wrote: »

Anyone can get it - and yes mine is only 12 months unemployment but it's until retirement for ill health.

My unemployment is £13 pm to cover £1430 pm and unemployment/ sickness is £47 for OH. That covers 4k per month payment (I don't have myself on sickness due to cancer and high premiums)

By making it extremely expensive it makes it prohibitive. Saying you don't have yourself on it due to cancer and high premiums backs this up.