Published in on Friday, May 01 2009 by Ideal Debt Solutions
If you’re worried about being able to keep up with your mortgage payments, there’s a new Government scheme that may be able to help.
Called the Homeowners Mortgage Support Scheme, it is designed to help homeowners stay in their homes during economic crises. If your mortgage is with one of the lenders that have signed up to the scheme and you get into financial trouble, you may qualify to make reduced mortgage payments and to defer the remained of your payments for up to two years. The government will then guarantee 80% of the interest repayments you weren’t able to make if you then have to default on the mortgage.
Basically, the Homeowners Mortgage Support Scheme is designed to help homeowners, who have temporarily lost part of their income, to keep their homes.
So what will happen?
If you apply for the scheme, you’ll initially be referred to an independent money advisor who will explain how the risks and benefits will affect you. If, having had the advice, you decide that the scheme is something you want to proceed with, then you’ll be able to defer up to 70% of your monthly payments for up to two years. But bear in mind that any money you defer paying will be added to the mortgage - and will have to be paid back, with interest, when your payments resume. In other words, you may later have to increase your payments or increase the length of your loan.
The scheme is, therefore, an excellent way of seeing you through the hardest of times and helping you to keep your home – should the need arise.
However, in order to qualify, you’ll need to meet the following criteria:
-You must be suffering a temporary loss of income – and monthly payments can only be cut by a maximum of 30%, so you’ll need some income.
-You must be an owner-occupier with a mortgage of less than £400,000.
-You must have less than £16,000 in savings.
-You must have bought your home before December last year.
-You must have talked through other possible options with your lender and you need to have been making regular payments for at least five months.
On the other hand, you won’t qualify for the scheme if:
-Your lender isn’t part of the scheme.
-You own more than one house.
-Your income is unlikely to return to its previous level.
-You have insurance that protects your mortgage payments.
-Your lender thinks you won’t be able to keep up with your monthly payments, even if they are reduced.
-You are claiming Jobseeker’s Allowance
If you’re worried about being able to keep up with your mortgage payments, take action. Communicate with your lender as soon as possible. And if you’re in debt, take expert personal debt advice as soon as you can – there are many different ways out of your situation.