In poor health but have a mortgage, can I claim LHA in this instance

zerohour

Hi all, I’m glad to be here even if I wish it wasn’t in such poor circumstances, I’m wondering if anyone can help me please?

I have a mortgage on my property (currently 2 years into a 5 year deal, good rates of 2.2% based on what is going on in the markets but unable to move without a £5k penalty)

I have had health problems from birth (end stage COPD / emphysema, with a whole lung removed) but until recently have always worked.

I was made redundant just before the pandemic, and have now picked up long covid, so am unable to work completely.

This is classed as 2 disabilities, and have just been diagnosed last week as autistic officially (I have however been on the waiting list for this for years!) for 3 disabilities now.

PiP will currently only give me £28.70 a week (standard rate mobility), I am currently appealing where it is expected I will be uplifted to enhanced on both, for £184.30.

I also am on both universal credit and enhanced LCWRA, as the DWP does not expect me to get a job with my health issues.

Unfortunately I am currently unable to pay my mortgage of £669 a month plus debts of £35k that have racked up due to my health issues. I have more coming out than coming in.

Because of this I have been forcing myself to go for interviews for jobs, because I need more money, and my body keeps breaking down - I was in hospital for pneumonia with this 2 months back, and the new job offer I was given was pulled for health reasons.

Is there anything I can do to keep my house?

If I was renting my home I would qualify for LHA, however as I have a mortgage I don’t - All they can offer is a type of loan that pays the mortgage interest only, plus I think 1.5% interest on top (which will be no use to me in the long term!)

I have a friend with CF in a similar position, he is also unable to work, but what has happened is his mum has bought his house and rents it back to him, with the DWP paying her. He suggested I try that, but I don’t know if it’s possible in my case?

I know normally you can’t claim LHA on a house you’ve lived in for 5 years after date of sale plus close relative, BUT - 
I am not making a profit, I am heavily in debt and have no assets I can sell. Apparently in certain situations exceptions can definitely be made.

Everyone I speak to both at the DWP & PiP is really sympathetic, but currently their hands are tied on what they can do themselves.

Is this feasible at all, and if not is there anything else that can be done?

I’ve spoken to citizens advice and as I am currently making all payments (albeit that will be unable to be done after this month) there is nothing there they are aware of.

I’ve always worked & don’t believe in ‘fiddling the system’ but I just want to know what can be done to help me keep my house after 15+ years of grafting without ever missing a payment of any kind (mortgage / credit card etc)

I can get the debts restructured so that isn’t a problem short term, but long term my mortgage is.

It’s got so bad I’ve attempted suicide over this, and please don’t anyone worry as I have the mental health crisis hotline number, plus I am not in any immediate danger, but I just want to explain how much this is weighing on me.

If anyone can help me that would be amazing please!

marcia_

zerohour said:

Hi all, I’m glad to be here even if I wish it wasn’t in such poor circumstances, I’m wondering if anyone can help me please?

I have a mortgage on my property (currently 2 years into a 5 year deal, good rates of 2.2% based on what is going on in the markets but unable to move without a £5k penalty)

I have had health problems from birth (end stage COPD / emphysema, with a whole lung removed) but until recently have always worked.

I was made redundant just before the pandemic, and have now picked up long covid, so am unable to work completely.

This is classed as 2 disabilities, and have just been diagnosed last week as autistic officially (I have however been on the waiting list for this for years!) for 3 disabilities now.

PiP will currently only give me £28.70 a week (standard rate mobility), I am currently appealing where it is expected I will be uplifted to enhanced on both, for £184.30.

I also am on both universal credit and enhanced LCWRA, as the DWP does not expect me to get a job with my health issues.

Unfortunately I am currently unable to pay my mortgage of £669 a month plus debts of £35k that have racked up due to my health issues. I have more coming out than coming in.

Because of this I have been forcing myself to go for interviews for jobs, because I need more money, and my body keeps breaking down - I was in hospital for pneumonia with this 2 months back, and the new job offer I was given was pulled for health reasons.

Is there anything I can do to keep my house?

If I was renting my home I would qualify for LHA, however as I have a mortgage I don’t - All they can offer is a type of loan that pays the mortgage interest only, plus I think 1.5% interest on top (which will be no use to me in the long term!)

I have a friend with CF in a similar position, he is also unable to work, but what has happened is his mum has bought his house and rents it back to him, with the DWP paying her. He suggested I try that, but I don’t know if it’s possible in my case?

I know normally you can’t claim LHA on a house you’ve lived in for 5 years after date of sale plus close relative, BUT - 
I am not making a profit, I am heavily in debt and have no assets I can sell. Apparently in certain situations exceptions can definitely be made.

Everyone I speak to both at the DWP & PiP is really sympathetic, but currently their hands are tied on what they can do themselves.

Is this feasible at all, and if not is there anything else that can be done?

I’ve spoken to citizens advice and as I am currently making all payments (albeit that will be unable to be done after this month) there is nothing there they are aware of.

I’ve always worked & don’t believe in ‘fiddling the system’ but I just want to know what can be done to help me keep my house after 15+ years of grafting without ever missing a payment of any kind (mortgage / credit card etc)

I can get the debts restructured so that isn’t a problem short term, but long term my mortgage is.

It’s got so bad I’ve attempted suicide over this, and please don’t anyone worry as I have the mental health crisis hotline number, plus I am not in any immediate danger, but I just want to explain how much this is weighing on me.

If anyone can help me that would be amazing please!

 As you are aware you can not claim help from LHA to pay a mortgage. There is the interest free loan available if your bank agrees to go interest free or you can make up the shortfall.

 What your friend has done is a contrived tenancy, Google it, and is not allowed. The property being rented from a relative must be a legitimate rental. Ie they give you a tenancy agreement and would evict you needed. Also it should preferably be a property that has or was advertised as a rental previously. 

zerohour

Thank you so much, I’ll ask my bank about the interest free loan option if it is available - Is this for my debts or something that could help with my house mortgage?

I believe my friend has got everything set up as a legitimate rental, though I am unsure if it was a rental property previously. The only difference is the person he is renting from is someone related to him.

I was aware it may be difficult to nigh-impossible, I was just trying to find ways of stopping myself from losing my house and this with a family member renting it back to me was all I could think of. 

I doubt it makes a difference but I wouldn’t be making a profit on the situation, if I was lucky I would be able to pay off some of my debts is all.

marcia_

zerohour said:

Thank you so much, I’ll ask my bank about the interest free loan option if it is available - Is this for my debts or something that could help with my house mortgage?

I believe my friend has got everything set up as a legitimate rental, though I am unsure if it was a rental property previously. The only difference is the person he is renting from is someone related to him.

I was aware it may be difficult to nigh-impossible, I was just trying to find ways of stopping myself from losing my house and this with a family member renting it back to me was all I could think of. 

I doubt it makes a difference but I wouldn’t be making a profit on the situation, if I was lucky I would be able to pay off some of my debts is all.

 This explains SMI https://www.gov.uk/support-for-mortgage-interest 

elsien

Would you be able to get a lodger in to pay towards the mortgage? 
Is it possible to downsize to somewhere more affordable? 

In very limited circumstances it can be possible to rent from a relative but you have to show it is not a contrived tenancy set up to take advantage of the benefits system. And (without judgement) that is what it would be in your case - your relative buying the house purely so you can get benefits to rent it back.
There is a distinction between that and your friend who presumably didn't own their house in the first place?

Universal Credit decisions on contrived tenancies | Housing Rights

Outside of your mortgage, have you taken any advice about how to deal with your debts. If they are non-secured, non priority ones (priority being mortgage, council tax and anything secured on your home) then there may be debt solutions you can look at. The debt-free wannabee section of this forum is very good on advice around round that if you want to start another thread there to explore those options? 

lisyloo

I would suggest getting a lodger. You can get a certain amount tax free.
I don't know if your place is big enough for 2 lodgers but I'd start with one.

housebuyer143

zerohour said:

Thank you so much, I’ll ask my bank about the interest free loan option if it is available - Is this for my debts or something that could help with my house mortgage?

I believe my friend has got everything set up as a legitimate rental, though I am unsure if it was a rental property previously. The only difference is the person he is renting from is someone related to him.

I was aware it may be difficult to nigh-impossible, I was just trying to find ways of stopping myself from losing my house and this with a family member renting it back to me was all I could think of. 

I doubt it makes a difference but I wouldn’t be making a profit on the situation, if I was lucky I would be able to pay off some of my debts is all.

It's not an interest free loan, and if you explain it to your bank like this they will be well and truly confused. 
You want to take it the SMI loan and then ask your bank to switch you to interest only, this way SMI covers all your payments for a short time. This is also only a stop gap because you can't go on interest only forever (it's normally 6 months), so if there is no chance of you being able to afford it then you might need to consider selling or getting a lodger to help. 

If they family member bought your house as a BTL and then rented it to you, you might be okay with this - but is a family member really going to take this on and then pay all the associated costs? It seems like a bad idea 

FreeBear

lisyloo said:

I would suggest getting a lodger. You can get a certain amount tax free.
I don't know if your place is big enough for 2 lodgers but I'd start with one.

Check to see if the DWP will reduce the benefits paid as a result of receiving rent (income). That may affect any decision to get a lodger in.

elsien

Money from a lodger doesn't count as income for universal credit. PIP is not means-tested. Not sure about any other means tested benefits such as council tax support, but yes, the OP would be wise to check.
They may hate the idea of sharing their house with someone (I would) but it may come down to what is the least worst option for them. 

MEM62

Could you afford the mortgage if you did not have the debts?  If that is the case then this is a debt issue and needs to be approached as such.  Concentrate on your priority debts - mortgage, utilities, council tax and feeding yourself.  If there is then nothing left to service and consumer debt (credit cards, loans etc) then you cannot pay them. Get over to the DFW board for meaningful advice.