SMI loan questions

starting_again_in_the_sun

Hi,

Please move if this isn't in the right place.

Unfortunately, I'm at risk of redundancy unexpectedly, just a few months after buying a house.

We get UC so can apply for the Support for Mortgage Interest loan payments now, but we're not sure if it's a good idea, so I'd like to ask a couple of questions:

- Any ideas how long it takes for mortgage provider to receive the first payment after you apply? 

- I've heard that getting SMI will make it almost impossible to remortgage, any experience of this? 


Thanks so much 

fatbelly

It's better than defaulting on your mortgage

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

NedS

Not speaking with any experience, just thinking out loud...

I can see how having another debt against the property (SMI) might make remortgaging more difficult, but if you are remortgaging, couldn't you just take out a larger mortgage and use the additional amount to clear the outstanding SMI debt (i.e, consolidate the outstanding SMI and mortgage debt) thus making the new lender the sole lender against the property.

I wonder if the fact you have SMI debt makes you higher risk in the eyes of the lender as it shows you have a history of being unable to meet your mortgage repayments without government support.

sheramber

SMI does not pay any capital repayment.

SMI is a loan towards the interest due on your mortgage.

details here  https://www.gov.uk/support-for-mortgage-interest/what-youll-get

starting_again_in_the_sun

fatbelly said:

It's better than defaulting on your mortgage

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

Fingers crossed we wouldn't be in that position, but may struggle to pay other debts. sheramber said:

SMI does not pay any capital repayment.

SMI is a loan towards the interest due on your mortgage.

details here  https://www.gov.uk/support-for-mortgage-interest/what-youll-get

Yes, I'm aware it's just for the interest, thanks.