Support for Mortgage Interest (SMI)

footballfan123

Hi,

I received a letter to confirm that I have been awarded SMI and that it would be backdated. I have a few questions:-

1) Will I receive the backdated payment into my bank account or will it go direct to the lender?

2) How far back can it be backdated?

3) Will it be breach of contract or will I have to pay a penalty if SMI pay a big lump sum to the lender?


Thanks

poppy12345

It is not paid to you at all, it's paid directly to your mortgage lender. It can be backdated to the date you became eligible to claim it, whether that's how far it's being backdated to for you, i have no idea.

Sorry, can't answer the other question though.

footballfan123

poppy12345 said:

It is not paid to you at all, it's paid directly to your mortgage lender. It can be backdated to the date you became eligible to claim it, whether that's how far it's being backdated to for you, i have no idea.

Sorry, can't answer the other question though.

Will the backdated payments include the benefits version of the support for mortgage interest (where you don't pay the money back) or will it just be the loan version?

Thanks

NedS

raz_123 said:

Will the backdated payments include the benefits version of the support for mortgage interest (where you don't pay the money back) or will it just be the loan version?

Thanks

SMI payments are a loan, repayable by you.

poppy12345

raz_123 said:

poppy12345 said:

It is not paid to you at all, it's paid directly to your mortgage lender. It can be backdated to the date you became eligible to claim it, whether that's how far it's being backdated to for you, i have no idea.

Sorry, can't answer the other question though.

Will the backdated payments include the benefits version of the support for mortgage interest (where you don't pay the money back) or will it just be the loan version?

Thanks

Surely you should have found that out before agreeing to repay it or even applying for SMI.

calcotti

SMI changed from a benefit to a loan in April 2018.

wakeupalarm

Do those in receipt of SMI prior to the change in April 2018 stay on the benefit version or are they moved to the loan version.  Depending on the answer it may have a bearing on the OP if they are backdated to prior to the change.

poppy12345

wakeupalarm said:

Do those in receipt of SMI prior to the change in April 2018 stay on the benefit version or are they moved to the loan version.  Depending on the answer it may have a bearing on the OP if they are backdated to prior to the change.

No,those that were claiming the benefit version were contacted about the changes and they had a choice to agree to accept the loan or not. If they didn't agree then no further payments were made. See link. https://www.gov.uk/government/publications/conversion-of-support-for-mortgage-interest-smi-from-a-benefit-into-a-loan/background-conversion-of-smi-from-a-benefit-into-a-loan-claimant-communication-and-loan-take-up

If the OP is expecting backdated money as far back as 2018 then it will still be the loan version.