If you are having problems paying your mortgage we will be able to provide you with advice and assistance, on the options available to prevent your homelessness, or the housing options available for finding alternative accommodation should you be repossessed.
You may also want to consider the following options:
- Can you downsize to reduce your mortgage?
- Can you get a better deal on your mortgage?
- Do you have equity you can release by selling?
- Are you eligible for an equity release scheme?
The housing management staff at our area housing offices can provide homeless prevention advice and information for all customers, and our homeless prevention team can provide more specialist advice to owner-occupiers who are struggling to pay their mortgages.
Tel: (01482) 393939
Our homeless prevention team, can provide advice on, or access to, a number of government schemes that aim to provide financial support to home owners hit by the economic downturn. These include the following:
- Support for mortgage interest
- Homeowner Mortgage Support Scheme
- Repossession Prevention Fund.
If you are having problems speak to your lender immediately. Don’t ignore the problem, as you will increase your chance of losing your home, and incurring further mortgage debt due to charges added by your lender. You need to discuss with them what options are realistically open to you.
- change to interest only payment?
- agree a payment holiday?
- extend the term of the mortgage?
If you have your own mortgage payment protection insurance, look at your policy to see when payments will start to be made as there is often a delay before you receive the first payment. If you do have this insurance, you will need to claim from it before seeking government help.
Support for mortgage interest
If you have lost your job, have savings of less than £16,000, and are claiming income support, job seekers allowance (JSA), employment & support allowance or pension credit you may be eligible for support for mortgage interest (SMI). This benefit pays the interest on the first £200,000 of your mortgage after 13 weeks of making your claim. You have to find the rest of the payments yourself, so if you are eligible for it, it is worth seeing if you can switch your mortgage to an interest-only one.
You can find out more about support for mortgage interest at the Direct Gov website:
Direct Gov (external website)
If you have been out of work and receiving a department of works and pensions benefit for 13 weeks or more, you will need to complete a MI12 form and send it to your mortgage lender. They will then process it and return it to jobcentre plus. Please note that if you have re-mortgaged (or raised capital as the lenders call it), SMI will only be paid on the original amount.
Homeowner mortgage support scheme
Homeowner mortgage support scheme is a scheme which will defer interest payments for up to two years and is applicable to those who suffer a significant loss of income due to job loss or loss of overtime. The valuation of the mortgage cannot exceed £400,000 and savings have to be less than £16,000.
The aim of the scheme is to prevent repossession and put your mortgage on hold until you are back in employment or your income has increased. The due interest payments are added up and tacked onto the outstanding mortgage to pay when you can afford it. Therefore, there will be more to pay later. It is possible the mortgage term will be extended to help, so the total amount of interest repaid over the mortgage lifetime will increase. As the scheme is run by the banks, it’s likely the deferral of interest will be recorded on your credit files and could affect your credit rating.
Contact your lender to see if they offer this scheme.
Repossession prevention fund
Repossession Prevention Fund loans are not currently available but they are still able to negotiate with lenders on your behalf and also attempt to put in place other measures to help prevent homelessness.
When available, the repossession prevention fund provides a one-off interest-free loan to homeowners who are at risk of losing their home because of a temporary setback e.g. losing their job. The loan is available to the elderly, disabled and families with young children who must obtain debt advice first. The maximum loan available is £5,000.
You also need to look at all your expenditure and make sure you are getting all the benefits you should receive. Give priority to those payments where non-payment has the most serious consequence, particularly mortgage payments and loans that are secured against your home (which may mean you losing your home) or utility bills that may lead to you being cut off. You should also contact those you have non-priority debts with to see if you can reduce your instalments.
Our money advice team offer a service for our customers who are struggling with rent and/or council tax payments or repaying overpaid housing benefit. They can negotiate repayment rates and offer debt and budgeting advice, as well as carrying out benefit checks.
If you are having problems with paying your council tax please contact us.
Tel: (01482) 394747
You may be eligible for a reduction in your council tax if you are on a low income, and can apply for council tax support online:
Apply for council tax support online
If after trying everything, repossession is inevitable, consider trying to sell the home yourself, you may get a higher price. Your lender must try to get the best price it can, but as lenders often sell properties at auction, this may result in a lower price than would fetch on the open market.
Whatever you do, don't hand in the keys to the mortgage lender unless you have sold the property as you are still responsible for mortgage payments and buildings insurance until the property is sold.