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Query re: Support for Mortgage Interest (SMI)

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Hope I am posting on the correct board?

My son who is disabled has been approached by the government Universal Credit department about the above.
My son and his partner do have a mortgage and thus I assume have been contacted as result of this and of course that he receives Universal Credit.
I do not have a great understanding of government benefits as I worked all my life and never had to need them, so if any one can help with this query I would be very grateful.
I have read the government info on the web and it appears that you get help with mortgage interest now and if/when you  die/sell your property the government claim back monies using a formula based on interest which can/does vary during the time you have the loan.
Please correct me if I have misunderstood any of the above.
My son and his partner are currently 'managing' with standard benefit payments and my inclination is to advise them to carry on with their standard benefit payments and to turn down the offer of entering this scheme.

I am hesitant on embarking on a scheme where the interest rates can vary, believing that as anything with interest it can alter a lot.
Any advice or correction on the above would be very welcome.

Thank you for any/all replies
 

Comments

  • NedS
    NedS Posts: 3,637 Forumite
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    I'm not an expert on SMI, but your understanding seems correct to me - it is a commercial loan secured against the property and is repayable or is recoverable upon sale of the property (or death).
    The idea is really to help those in severe financial difficulty to at least meet interest payments on their mortgage in times of hardship to avoid repossession (and homelessness). If your son can afford the repayments, then it would not appear to make any financial sense to take out further loans with additional interest payable, thus getting into further debt.

  • TUVOK
    TUVOK Posts: 462 Forumite
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    NedS said:
    I'm not an expert on SMI, but your understanding seems correct to me - it is a commercial loan secured against the property and is repayable or is recoverable upon sale of the property (or death).
    The idea is really to help those in severe financial difficulty to at least meet interest payments on their mortgage in times of hardship to avoid repossession (and homelessness). If your son can afford the repayments, then it would not appear to make any financial sense to take out further loans with additional interest payable, thus getting into further debt.

    Thanks NedS, totally agree, seems a added complication as they just about manage. 
  • calcotti
    calcotti Posts: 15,696 Forumite
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    NedS said:
    I'm not an expert on SMI, but your understanding seems correct to me - it is a commercial loan secured against the property and is repayable or is recoverable upon sale of the property (or death).
    The idea is really to help those in severe financial difficulty to at least meet interest payments on their mortgage in times of hardship to avoid repossession (and homelessness). If your son can afford the repayments, then it would not appear to make any financial sense to take out further loans with additional interest payable, thus getting into further debt.

    I wouldn't describe it as a 'commercial' loan but that has no practicable implications - I agree with everything else you've said.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • TUVOK
    TUVOK Posts: 462 Forumite
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    Thanks to you both for your comments.

    It's reassuring that your opinions on this scheme echo my own.
    I've just spoken to my son and advised him against signing up for it, that was his initial reaction, but he wanted to run it past his old Dad.
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