DWP Help with Mortgage Interest

Danday

Have just been reading some posts on Rightsnet regarding the above.
I am extremely surprised that this website is not making what is currently happening a public interest story.

Seems that by last week only 11% of current recipients of help have actually applied for the new loan scheme starting in just over 2 weeks.

89% of those that are currently getting help towards the interest that they are paying don't seem interested in asking for the help as from the 5th April

If this is the true position, the government will have identified those 89% as not needing the help they have previously been getting.

This is like saying that 89% of those who were on IB decided not to bother claiming ESA!

Wizardy18

Criteria is more invasive hence why most people don't want their personal affairs being looked at, hence why they aren't going to claim.

So I'd question more so why those people don't want to claim, and what are they hiding.

WhenIam64

So I'd question more so why those people don't want to claim, and what are they hiding.

The answer is probably far simpler.

If you cannot repay the interest, the interest debt is rolled up and added to the total debt. It's just the choice of whether you allow the mortgage company to own the interest debt or HMG.

As long as the mortgage company are happy to allow the debt to be rolled up (loan to value ratios will apply) then why take out what is in effect a second mortgage with the government.

As regards the 89% what the issue the government was pointing to was that the was capital accrual through a growth in house prices that was getting a subsidy. So as long as the capital is growing faster than the mortgage debt, the LTV trigger for repossession won't kick in.

Can't see why anyone would think this to be an issue if you work through the logic of it.

Danday

Exactly Wiz. I cannot imagine any bank agreeing to no interest being paid each month on a mortgage. Effectively what seems to be happening is that those claimants who don't want help are well able to service the mortgage and interest out of their existing income. So why did they feel the need to ask for the help previously? Maybe they saw it as a way of reducing the mortgage debt courtesy of the government?
Alternatively they had a source of capital earning interest that was sitting there to pay off the mortgage, but decided against doing so as the interest that they were paying to the bank was considerably lower than what the DWP was giving them - hence another source of capital reduction. I honestly believe that over the next few months instead of there being more repossessions there will be an increase in the number of mortgages being settled.

It doesn't take much thought to suggest that this capital is either held via an insurance policy, is in a trust or maybe in an account of a close family member.

[Deleted User]

I suspect that the 89% figure will increase a lot as we get nearer the change

borkid

Danday wrote: »

Have just been reading some posts on Rightsnet regarding the above.
I am extremely surprised that this website is not making what is currently happening a public interest story.

Seems that by last week only 11% of current recipients of help have actually applied for the new loan scheme starting in just over 2 weeks.

89% of those that are currently getting help towards the interest that they are paying don't seem interested in asking for the help as from the 5th April

If this is the true position, the government will have identified those 89% as not needing the help they have previously been getting.

This is like saying that 89% of those who were on IB decided not to bother claiming ESA!

My OH is the guarantor for my daughter's mortgage and hence we would be liable if she doesn't pay. We have decided it is better for us to pay her interest than risk her not paying. So will make economies to help our daughter who is chronically ill through no fault of her own and no cure at the moment. The letter she received did say ask family members for help.

Danday

borkid wrote: »

My OH is the guarantor for my daughter's mortgage and hence we would be liable if she doesn't pay. We have decided it is better for us to pay her interest than risk her not paying. So will make economies to help our daughter who is chronically ill through no fault of her own and no cure at the moment. The letter she received did say ask family members for help.

It certainly did but what I fail to understand that if family members are now ready to step in, why didn't they step in before? It just doesn't add up to me.

Danday

venison wrote: »

I suspect that the 89% figure will increase a lot as we get nearer the change

I would certainly hope so otherwise it is clear that they don't need the help now that is a loan but needed it when it was a benefit?

Cheeky_Monkey

It seems to me that the 89% of claimants were more than happy to take the 'free' money but now that it will have to be paid back, it's a lot less appealing

Xbigman

Every time there is a benefit change a high proportion of claimants let the old benefit run out before putting their new claim in. The 89% figure is a bit higher than usual because, as explained in post #3, some claiments would rather owe the mortgage company than the Govt.

Non story IMO.


Darren

Xbigman

Danday wrote: »

It certainly did but what I fail to understand that if family members are now ready to step in, why didn't they step in before? It just doesn't add up to me.

Parents willing to sacrifice to stop their sick child going into debt 'adds up' just fine for those of us with a heart.



Darren