Havering Welfare Benefits Adviser Lorraine Moss today writes in the Havering Daily.
Always Contact Your Lender
It is always best to contact your lender at the outset, there are a number of options that they may be able to offer. At the outset of The Covid 19 pandemic, many people were able to get mortgage holidays. Please see https://www.bing.com/news/search?q=Martin+Lewis+Mortgage+Holidays&qpvt=martin+lewis+mortgage+holidays+&FORM=EWRE for the latest information regarding mortgage holidays.
You also may be able to change to interest only payments as a temporary measure or even be able lengthen the term of your mortgage.
Support For Mortgage interest Payment (SMI)
In these very difficult times, a large number of people are finding themselves in a position where they cannot pay their mortgages.
People used to be able to claim for help with mortgage interest payments after a very long qualifying period. Help is still available but it now treated as a loan which has to be paid back if the property changes ownership. You cannot claim for this help if you have any earned income. There is a long qualifying period and you cannot apply until you have received 9 consecutive Universal Credit payments.
What you’ll get
If you qualify for Support for Mortgage Interest (SMI), you’ll get help paying the interest on up to £200,000 of your loan or mortgage. This figure is £100,000 if:● you’re getting Pension Credit● you started claiming another qualifying benefit before January 2009
If you’re already getting SMI and move to Pension Credit within 12 weeks of stopping your other benefits, you’ll still get help with interest on up to £200,000.
The interest rate used to calculate the amount of SMI you’ll get is currently 2.61%.
What you’ll pay back
SMI is paid as a loan. You’ll need to repay the money you get with interest when you sell or transfer ownership of your home.
The interest added to the loan can go up or down, but the rate will not change more than twice a year. The current rate is 0.9%.
If you want to pay the loan back more quickly, you can also make voluntary repayments. The minimum voluntary repayment is £100 or the outstanding balance if it’s less than £100.
How SMI is paid
SMI is normally paid direct to your lender.
Payments can start either:● from the date you start getting Pension Credit● after you’ve had 9 consecutive Universal Credit payments● after you’ve claimed any other qualifying benefit for 39 consecutive weeks
Your payments are usually divided into rent, mortgage and in some cases service charges.
You can apply for help with the mortgage interest payments if you meet the criteria already outlined for SMI. You can also apply for help with the rental part of your payment and in some cases for some of the service charges please see https://www.entitledto.co.uk/help/Shared-ownership.