Support for Mortgage Interest and credit score

heyhoo

Hi, I am on benefits, including income support, and qualify for Support for Mortgage Interest.

I am fortunate to get a good amount of child maintenance, so I have been continuing to pay my mortgage in full myself and it is affordable.

I am concerned that if I claim SMI, it could affect my internal credit score with the bank that my mortgage is at, and it could make me less attractive to them for a new mortgage if I want to move house (which I do)

Obviously claiming SMI would make life easier but would I been seen as more responsible for claiming it or more of a liablity for claiming it?

Thanks

[Deleted User]

I don't think it wouldn't make any difference. Any new mortgage would go through affordability where they would look at income and so. SMI would just be one part of it.

Presumably if you didn't claim SMI, your ability to make repayment would be even worse, so I don't see any reason not to claim it.

However, you may want to speak to your lender (or a broker) directly before taking any action.

heyhoo

Good point about affordability.

Does anyone know if SMI can be transferred to a new property, or a new claim taken out for a new mortgage after moving? I'm assuming that SMI might only be for mortgages that predate the claim for Income Support.

National_Debtline

Hi

I agree with zx81. If you’re getting Income Support anyway I don’t see why SMI would make any difference. All SMI would indicate is that your income is made up of benefits, which they would presumably know anyway when you apply for a mortgage. Bear in mind there is now a 39 week waiting period for new SMI applications.

I'm not sure about transferring an existing claim over to a new mortgage. Shelter have some information on SMI on their website so they might be able to answer your question if you contact them.

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

James
@natdebtline

Thrugelmir

heyhoo wrote: »

I am concerned that if I claim SMI, it could affect my internal credit score with the bank that my mortgage is at, and it could make me less attractive to them for a new mortgage if I want to move house (which I do)

Are you proposing to downsize and reduce the size of your mortgage in the process?

heyhoo

Yes, I am planning on reducing my mortgage (but upsizing by moving area)