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Mortgage Rescue Scheme

Date: (8 May 2013)    |    

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Those who are having difficulties in making their mortgage repayments and are facing the danger of becoming homeless can avail financial help to stay in their homes under the Mortgage Rescue Scheme.

It becomes the last resort after all other avenues, of making repayments easier, have been exhausted but one has to talk to their lenders first. The application is made through one’s local councils.

The scheme is only available in England and those living in Scotland, Wales or Northern Ireland should contact their local council to find out whether similar schemes are available there.

What one gets under the scheme depends on the individuals circumstances.
When applying -
• the council arranges a meeting of applicant and money adviser if an adviser is not already there for the applicant
• they may also arrange an assessment of the applicants home
• the applicant would get advice and a plan to help you manage your debt
Financial help
There are 2 kinds of financial help. With both, the council involves a Registered Social Landlord (RSL). This is an independent housing organisation. The RSL provides an interest only loan to help pay off some of the applicant’s mortgage and reduce payments to an affordable level. One would need only 40% equity in the property to qualify for the financial help.
Government mortgage to rent
The RSL buys the individuals home for 90% of its market value. The applicant continues to stay in their home and pay rent to the RSL. The rent will be 20% less than the market rate for that particular area.
Eligibility
In a household someone must be in ‘priority need who could include:
• a pregnant woman
• someone with dependent children
• someone who is vulnerable because of old age or a physical or mental impairment
Other criteria would include:
• the household income being less than £60,000 a year
• the applicant do not own a second home, including abroad
• the value of the applicants mortgage (and any loans taken out against their home) is between 75% and less than 120% of the value of applicants home
• the value of your home isn’t higher than the level set for the applicants region (council could be asked about this)
There are other criteria as well which local council could advice on for eligibility and priority need.

 

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