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

Confuseddot

bloolagoon wrote: »

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.

Given that you probably going to be in mortgage arrears due to the 9 months you have to find the full mortgage for and then the further 9 where you are only getting the interest you going to have a lot of money to pay back to get back on an even keel.

Whereas someone who is in rented accommodation will get the LHA or social equivalent from day 1 of claim and have to pay nothing back.

bloolagoon

Confuseddot wrote: »

Given that you probably going to be in mortgage arrears due to the 9 months you have to find the full mortgage for and then the further 9 where you are only getting the interest you going to have a lot of money to pay back to get back on an even keel.

Whereas someone who is in rented accommodation will get the LHA or social equivalent from day 1 of claim and have to pay nothing back.

No disagreement on the 39 weeks - think it's wrong, I don't know how long they take to evict though. I agree with the charge but think the waiting time is too long

Confuseddot

bloolagoon wrote: »

No disagreement on the 39 weeks - think it's wrong, I don't know how long they take to evict though. I agree with the charge but think the waiting time is too long

I think it was more tapered in that you still got some run on help more in line with housing benefit and maybe a 1 month wait or something.

I can't work out what would be a fair system so mind still bit confused by it all as my name suggests :rotfl:

bloolagoon

Confuseddot wrote: »

I think it was more tapered in that you still got some run on help more in line with housing benefit and maybe a 1 month wait or something.

I can't work out what would be a fair system so mind still bit confused by it all as my name suggests :rotfl:

No IMO 39 weeks is wrong - the charge I live with. You either work again as short term unemployment (fair do's as stayed in your home) and repay at an affordable rate or LONG term you stay for years.

But when you die or need care it's deducted from equity.

missbiggles1

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.

In the example that was being discussed, 90% of the mortgage had been repayed, so negative equity wasn't a problem.

Moving might well be to somewhere smaller (particularly for someone who was ill) rather than out of the area.

Ames

So all you have to do is crash the value of the house and/or increase the mortgage to get out of having to repay the SMI?

rogerblack

bloolagoon wrote: »

The interest rate is very low and it can be laid back at any time..

I could not find a direct source for the interest rate as I skimmed the legislation, only that it would be provided on a for-profit basis by existing companies in the market.
Was this incorrect?

FBaby

woodbine wrote: »

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

Funny how when the obvious is pointed out, there is always one to refer to a minority to justify why the point isn't valid! No, not everyone can get cover, but the vast majority can, and yet somehow, few do.

The reality is that we live in a society where people only consider the present or very near future and want immediate gratification. The prospect of paying, hence having less in to spend, immediately for future protection is something more and more people refuse to consider, but then expect others (often those who have made the investment) to pick up when it goes wrong.

bloolagoon

rogerblack wrote: »

I could not find a direct source for the interest rate as I skimmed the legislation, only that it would be provided on a for-profit basis by existing companies in the market.
Was this incorrect?

It's linked to the OBR for gilts. I think currently 2.something APR and the forecast for 2018 is 2.9%.

dodger1

woodbine wrote: »

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

Up to 24 months according to MSE, and most people are re-employed or healthy again within that time period and probably within 12 months. Yes of course there will always be a few who can't get cover but for the vast majority (IMO) it's a good idea,

http://www.moneysavingexpert.com/mortgages/payment-protection-insurance