Are you worried about your mortgage?

We have produced an information leaflet which gives some useful information if you are having difficulties with your mortgage. It also has useful contact details. Further information is given in the mortgage arrears leaflet.

Further help and information for people facing mortgage difficulties can be found at http://mortgagehelp.direct.gov.uk/

The Government has recently initiated a range of new measures to help if you are having difficulties with your mortgage and prevent homelessness.

Lender Options

You should in the first instance contact your lender to discuss your situation and explore all the lender options. Mortgage lenders should only take possession action as a last option. The lender options include;

Agree to change or lengthen the term of your loan.
Accept reduced monthly payments from you in the short term.
Add your debt to the amount you have borrowed.

A lender can;

Reduce your monthly payments for a certain period or cut what they charge you for being in arrears with your mortgage; and
Extending the length of the loan
Spreading the payment of the total amount owed
Offering a better loan rate
Allowing you time to sell your home (if that is preferred by you)

Support for Mortgage Interest (SMI)

Support for Mortgage Interest can help if you are paid work of less than 16 hours a week, or your partner is in paid work of less than 24 hours a week and you have a mortgage or other loans which are secured on your property.

SMI is paid as part of Income Support, income based Jobseeker's Allowance, income related Employment and Support Allowance or Pension Credit. It is for households that can get or are getting any of these benefits.

SMI makes a contribution towards the interest on eligible loans. Payments are calculated using the Bank of England published average mortgage rate and are subject to change.

SMI can be paid on loans of up to £200,000 and would be paid after 13 weeks for most people making a new claim who are of working age. If you receive Pension Credit, you do not have to wait before getting help with your mortgage, and SMI can be paid on loans of up to £100,000.

If you are on benefits and who are having trouble paying your mortgage you should contact your local Jobcentre or Jobcentre Plus Office for further information.

You should also visit www.direct.gov.uk, www.jobcentreplus.gov.uk or www.thepensionservice.gov.uk for more information.

Pre-action protocol

In October 2008 a new pre-action protocol for mortgage possession cases was introduced. Lenders will be expected to discuss and agree alternative arrangements to repossession and if a case reaches court, they will be required to provide details to the court of what help and support they have offered.

Mortgage Rescue Scheme

The governments Mortgage Rescue scheme is a "last resort" option when all other possibilities have been explored and you are at risk of homelessness.

If your household earns less than £60,000 per year and your property is worth less than £235,000, you may qualify for this scheme if you also have dependant children or anyone in your household is pregnant, elderly or disabled.

To get help under the scheme you will need to:Ask West Oxfordshire Citizens Advice Bureau to carry out an up to date assessment of your finances, which will show whether the Mortgage Rescue Scheme is an option for you.
Check that your lender has considered other options and will support your application.
Be sure there are currently no orders or charges on your property that would stop it being sold and provide an up to date valuation of your property to show its possible selling price; and
Show there is enough equity in your home. This is the difference between how much your property is worth and the amount you owe on your mortgage.

Depending on your specific circumstances, there are two possible solutions the scheme can provide.

Shared equity option This is when a Housing Association provides an equity loan to reduce your monthly payments. You will still own the property. You will repay the loan at a low interest rate and the loan will be secured on your home
Mortgage to rent This is when a Housing Association buys your property at the market value and you then become the housing association's tenant on an assured shorthold tenancy and pay them rent.

A Mortgage Rescue checklist can be downloaded which gives basic information on whether a homeowner may be considered further for the scheme.

Further information on the scheme will be added to this page when this is available.

Further general information and advice is given in the National Homelessness Advice Service Leaflet, Are you worried about your mortgage? which you can download. You can also obtain a copy from Housing Services or at the Town Centre Shop, 3 Welch Way, Witney.

Homeless Prevention Fund

This is a new government initiative, which the Council will administer.

The fund has been set up to provide interest free loans to families in West Oxfordshire who are at risk of homelessness through repossession or eviction.

It will help homeowners who are struggling with mortgage costs and tenants in social or private-rented housing who, through no fault of their own, are struggling with mortgage or rental payments and face eviction.

To qualify, any arrears should have arisen due to debt or income shock caused by loss of earnings or reduced hours where there is no previous history of high arrears.

There are other eligibility criteria that applicants will have to meet in order to qualify for a loan.

Loans are expected to be in the range of £1,000 to £3,000 per household, with a maximum loan amount of £5,000. The loans will need to be paid back, but interest will not be charged.

Loans will only be made where all other options have failed or where there is another way to resolve the problem.

It is a requirement that anyone applying for a loan must be able to show that they have received debt and financial advice that they have acted upon.

If you require further information please contact Housing Services or Tel: 01993 861010.