morgage question

northerntwo1

BigAunty wrote: »

Thanks for confirming, I must have missed the announcement in the Budget and still don't find much information on it. It's apparently a bill that's going through Parliament.

This article indicates it will switch in 2018 (and others say 2018-19) but it's still going to be a close call for the OP to find 10k, plus interest, in 2-3 years on benefits if the bill does go through.

http://www.mortgagefinancegazette.com/arrears/budget-smi-to-become-a-loan-not-a-benefit/

A bit more info here for the OP

http://blog.shelter.org.uk/2015/07/changes-to-support-for-mortgage-interest-mark-fundamental-shift-in-welfare-provision/

http://www.parliament.uk/documents/impact-assessments/IA15-006D.pdf

Martin had a very good article and how it will work here on MSE at the time but I can't find it now. It was in the how will the budget affect you. It had the rate of the loan, how it was to be repaid, terms and other detail but I didn't pay much attention other than it being part of the general budget announcement.

BigAunty

northerntwo1 wrote: »

Martin had a very good article and how it will work here on MSE at the time but I can't find it now. .

I can't find it either, other than a note on MSE that it commences from April 2018.

Does it affect all SMI claims or just new ones submitted after that date?

I assume it affects all or it wouldn't save much money as the majority of SMI claimants are likely to be on benefits like Pension Credit that aren't time limited, plus mortgage terms last for years.

northerntwo1

BigAunty wrote: »

I can't find it either, other than a note on MSE that it commences from April 2018.

Does it affect all SMI claims or just new ones submitted after that date?

I assume it affects all or it wouldn't save much money as the majority of SMI claimants are likely to be on benefits like Pension Credit that aren't time limited, plus mortgage terms last for years.

I honestly don't know I was more paying attention to the tax credit changes.

silvercar

http://www.moneysavingexpert.com/news/protect/2015/07/summer-budget-2015-millions-to-face-benefit-cuts

Scroll down to very near the bottom. It was updated 6/8/15 to include newer information.

(I found it using the search bar at the top right of the full MSE page ie not the forum search facility.)

silvercar

Support for mortgage interest now treated as a loan

Under the Support for Mortgage Interest (SMI) scheme, the Government makes interest payments on the first £200,000 of outstanding mortgages for those who can't afford it (see our guide for the full eligibility criteria). This is normally paid directly to the lender. But while it's currently a grant, from April 2018 it will be treated as a loan to all new and existing SMI claimants.

The Government says current claimants will receive guidance in advance on how this will work, and will need to decide if they wish to continue under the new loans system.

However, the Government has confirmed the loan will not be backdated, so any SMI that's been paid to claimants before April 2018 will remain a benefit, with no obligation to be paid back.

How will the loan work? A low level of interest will be charged on the loans – forecast to be 2.9% in 2018/19 – and will be updated every six months in line with a complicated Government forecast for the value of gilts.

The loans will be secured on the claimant's property as a 'second charge' (effectively a secured loan on top of the existing mortgage).

Technically, as this is a secured loan, the Government could repossess your home if you don't repay the loan. However, the Department for Work and Pensions says in reality the Government would never repossess your home under these circumstances.

Loan recipients will then be liable to pay back the loan the sooner of when they return to work, or when they sell their property.When someone gets a job a repayment plan will be agreed. If you refuse to repay the loan it'll be recovered from the sale of the property.

What happens if I can't afford to pay the loan back? In the case of those who receive SMI for a long time (e.g. into their retirement and up to their death), the amount of SMI paid plus interest, along with an administration charge, would be recouped from the equity in the property when it is sold.

Update: 6 August 2015: At the time of publishing we incorrectly wrote that if there is insufficient equity, the entire SMI loan balance will be written off, and the Government won't attempt to take any proportion of the debt. In actual fact, if there is insufficient equity, what is available will be used to pay off the loan. Any balance of the SMI loan still unpaid after this will then be written off.

See our Mortgage Arrears guide for more on how SMI works and for help if you're struggling to pay your mortgage.

northerntwo1

That's the one you are very clever I searched and couldn't find it. Thank you

tea-bag

silvercar wrote: »

Support for mortgage interest now treated as a loan

Under the Support for Mortgage Interest (SMI) scheme, the Government makes interest payments on the first £200,000 of outstanding mortgages for those who can't afford it (see our guide for the full eligibility criteria). This is normally paid directly to the lender. But while it's currently a grant, from April 2018 it will be treated as a loan to all new and existing SMI claimants.

The Government says current claimants will receive guidance in advance on how this will work, and will need to decide if they wish to continue under the new loans system.

However, the Government has confirmed the loan will not be backdated, so any SMI that's been paid to claimants before April 2018 will remain a benefit, with no obligation to be paid back.

How will the loan work? A low level of interest will be charged on the loans – forecast to be 2.9% in 2018/19 – and will be updated every six months in line with a complicated Government forecast for the value of gilts.

The loans will be secured on the claimant's property as a 'second charge' (effectively a secured loan on top of the existing mortgage).

Technically, as this is a secured loan, the Government could repossess your home if you don't repay the loan. However, the Department for Work and Pensions says in reality the Government would never repossess your home under these circumstances.

Loan recipients will then be liable to pay back the loan the sooner of when they return to work, or when they sell their property.When someone gets a job a repayment plan will be agreed. If you refuse to repay the loan it'll be recovered from the sale of the property.

What happens if I can't afford to pay the loan back? In the case of those who receive SMI for a long time (e.g. into their retirement and up to their death), the amount of SMI paid plus interest, along with an administration charge, would be recouped from the equity in the property when it is sold.

Update: 6 August 2015: At the time of publishing we incorrectly wrote that if there is insufficient equity, the entire SMI loan balance will be written off, and the Government won't attempt to take any proportion of the debt. In actual fact, if there is insufficient equity, what is available will be used to pay off the loan. Any balance of the SMI loan still unpaid after this will then be written off.

See our Mortgage Arrears guide for more on how SMI works and for help if you're struggling to pay your mortgage.

Shame it is not backdated could get millions back. Hi people will get round it by renting from family and friends.