Help for home owners - full version

June 2009

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Government mortgage rescue schemes

Two Government backed mortgage rescue schemes are now available:

• Shared equity scheme
Under this scheme, a Registered Social Landlord (RSL), such as a housing association, provides an equity loan to pay off part of your mortgage. This reduces your monthly mortgage payments. The RSL then owns a share in the equity of your property. The amount of loan you can receive is decided by the RSL and is based on your household finances. Interest on the shared equity loan is currently 1.75%, which is paid as a monthly fee.

This scheme is aimed at those who have experienced ‘payment shocks’. This could be where your income has stayed the same but your cost of living has risen, or your monthly mortgage payments have increased after a re-mortgage.

• Government Mortgage to Rent scheme
In this scheme, a Registered Social Landlord (RSL) buys your property and rents it back to you. The rent is usually cheaper than renting from a private landlord. This scheme is aimed at vulnerable households on low incomes who cannot keep up their mortgage payments.

You should get independent advice before entering into this scheme. Selling and renting back a home that you have previously lived in can affect your entitlement to housing benefit. If you may claim housing benefit after the sale of your home, check with the local authority that you would meet the criteria.

If a private company that is not part of the Government scheme, offers to buy your home and rent it back to you, get independent advice to make sure you are getting a fair deal.

Can I apply for the Government mortgage rescue schemes?

To qualify for either of these Government mortgage rescue schemes, you must meet certain criteria. The criteria include someone in your household being considered to be in priority need. You may be considered a priority if you are pregnant, unwell or have dependent children. You may still qualify for help if your property is in negative equity. For more information visit www.direct.gov.uk .

How do I apply?

In England and Wales, the scheme is run by local authorities in partnership with housing associations - contact the housing department at your local council for further information. In Wales, information can also be provided by the Housing Directorate at the Welsh Assembly Government (Tel: 01685 729156 or 01685 729157).

Home Owner Mortgage Support

This is a Government scheme introduced to help with temporary difficulties in meeting your mortgage payments. The scheme can reduce the interest that you pay on your mortgage for up to two years. This should have the effect of reducing your monthly payments and could be helpful if your mortgage interest is fixed at a high rate. Any interest not paid during the time you are on the scheme will be added to the amount of mortgage remaining. If you have a repayment mortgage, only the interest part of your monthly mortgage payment will be reduced; so you will still have to pay the capital part.

To be eligible, your mortgage lender must be participating in the Government scheme or your mortgage lender may be offering an equivalent scheme.

To qualify for this scheme you must meet certain criteria, such as having a regular household income and you must seek independent advice. For further information and to find out how to apply, contact your mortgage lender or see www.direct.gov.uk

Help with your mortgage interest if you are claiming benefits

To qualify for help with your mortgage interest through the benefits system, you must be claiming certain benefits. You can only get help as part of a claim for Guarantee Pension Credit, Income Related Employment and Support Allowance, Income Based Jobseekers Allowance or Income Support. If you are entitled to these benefits but do not receive a payment because of other income or savings, you may still be entitled to help towards mortgage interest.

Help from this scheme only covers the interest due on your mortgage. It will not cover payments to reduce the actual loan borrowed or any other mortgage payments such as an endowment. There is also a waiting period before payments can begin.

For more information, contact the Gingerbread single parent helpline (0808 802 0925), your local Citizens Advice Bureau, or independent advice centre.

Where can I get advice and further information?

Citizens Advice Bureau
www.citizensadvice.org.uk

Community Legal Advice
(Advice on debt, housing and family law. Search for a legal adviser near you or call the helpline)
www.communitylegaladvice.org.uk
Tel: 0845 345 4 345

Communities and Local Government Department
(Government department providing information on all of the above options - publications are available to order or download)
www.communities.gov.uk
Tel: 020 7944 4400

Consumer Credit Counselling Service
(Free debt advice, information and debt management plans)
www.cccs.co.uk
Tel: 0800 138 1111

Directgov
(Website providing information on Government schemes.)
www.direct.gov.uk

National Debtline
(Free help and advice on all aspects of dealing with debt)
www.nationaldebtline.co.uk
Tel: 0808 808 4000

Shelter
(Specialist housing advice)
www.shelter.org.uk
Advice line: 0808 800 4444


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