Mortgage Rescue Schemes
Vulnerable residents at risk of losing their homes are being encouraged to seek help from North East Derbyshire District Council, as part of a new mortgage rescue scheme which is being rolled out across the district.
People who are struggling to meet mortgage repayments - and may be facing the threat of having their property repossessed - are urged to find out what support is available to help them stay in their homes (see 'Are You Worried About Your Mortgage? - Get Advice Now', below).
The scheme is part of a £200m nationwide rescue package announced by the Government, which is being jointly run in this area by the Council, NE Derbyshire Citizens' Advice Bureau (NEDCAB), Chesterfield Law Centre and local housing association, East Midlands Housing.
It allows for the housing association to either buy the property outright and rent it back to the householder on a lower rent, or to buy a stake in the property on a shared equity basis - so lowering people's monthly mortgage repayments.
To qualify for the scheme homeowners must have first spoken to their mortgage lender to try and arrange a suitable payment plan. If an agreement can't be reached, the Council and NEDCAB can then step in to help - assessing if the person is eligible.
There are two options available under the scheme, which would see the housing association either:
People who are struggling to meet mortgage repayments - and may be facing the threat of having their property repossessed - are urged to find out what support is available to help them stay in their homes (see 'Are You Worried About Your Mortgage? - Get Advice Now', below).
The scheme is part of a £200m nationwide rescue package announced by the Government, which is being jointly run in this area by the Council, NE Derbyshire Citizens' Advice Bureau (NEDCAB), Chesterfield Law Centre and local housing association, East Midlands Housing.
It allows for the housing association to either buy the property outright and rent it back to the householder on a lower rent, or to buy a stake in the property on a shared equity basis - so lowering people's monthly mortgage repayments.
To qualify for the scheme homeowners must have first spoken to their mortgage lender to try and arrange a suitable payment plan. If an agreement can't be reached, the Council and NEDCAB can then step in to help - assessing if the person is eligible.
There are two options available under the scheme, which would see the housing association either:
Government mortgage to rent
EMH buy the property for 90 per cent of its market value & the rent will be 20 per cent less than the market rate for the area.
Equity loan
EMH can provide an interest-only loan, which is used to pay off some or all of the mortgage or secured loans, allowing monthly repayments to be reduced to an affordable level. To qualify there must be a maximum 40% equity in the property.
To be eligible for the scheme:
- The household must be in 'priority need' - for example, residents must be responsible for children, be pregnant, have a serious health problem or disability
- The value of the property should not exceed £155,000 *
- The annual household income should not exceed £60,000
- The household must have 5% equity in the property, except when the property is bought outright and rented back
- The property must be habitable and suitable for the family
Those who are not eligible for the scheme will be given advice and support to make alternative arrangements, for example, renting out rooms within their household or down-sizing their property.
*£155,000 at current market valuation - remember that house prices are fluctuating, so if you think your property may now be worth around that figure please get in touch - you may qualify.
*£155,000 at current market valuation - remember that house prices are fluctuating, so if you think your property may now be worth around that figure please get in touch - you may qualify.
Alternatively, if your income has reduced for a temporary period, up to 2 years, you should also read the ‘Guide to Homeowners Mortgage Support’ leaflet below.
Benefit Claimants
If you are claiming certain benefits, you may be able to get help with your housing costs, including mortgage interest & interest on loans you have taken out for repairs or improvements. This type of help is often referred to as support for mortgage interest (SMI) or income support mortgage interest (ISMI) payments.
For more information contact your local Department of Work & Pensions (DWP) office.
Downloads
This leaflet provides step-by-step information to help you begin to sort out your money worries and to make other arrangements for paying your mortgage and keeping your home. (441 KB)
A guide from the government about Homeowners Mortgage Support. (2.05 MB)
Homeowners Mortgage Support (HMS) is the latest Government initiative to help people at risk of repossession. This document answers all questions you may have about the scheme. (32.4 KB)
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