Mortgage Rescue Scheme
In January 2009 the Government launched a Mortgage Rescue Scheme
with the aim of supporting vulnerable households facing
repossession to remain in their own home.
The Government has made £200 Million worth of funding available
to help up to 6,000 households over the next 2 years.
Can I get help under this scheme?
To obtain help;
- You must be the homeowner.
- Your lender must have exhausted all to the hardship options
that are available, there are a total of eight but not all of them
will be applicable to your circumstances.
- The total family income of your household must be below £60,000
per year.
- Your property should be valued at under £135,000, but this
could be greater in certain circumstances.
- Your household must contain one of the following;
- Dependant Child
- Pregnant Woman
- A person who is vulnerable due to old age, mental illness, or
physical disability.
- You must want to be considered for the scheme and want to stay
in your property.
- The scheme must be affordable for your household.
- Any debt on the property must be less than 120% of the market
value.
How will the scheme help?
Households will be helped by one of two options. The most
appropriate solution for your family will be based upon your
financial circumstances.
The two options are;
- Shared equity, you sell a share of your home to a Housing
association.
- Mortgage to Rent, your home is sold to a Housing Association so
you can remain as a tenant and pay a rent below the market
rent.
What if I need Debt or Legal advice?
If you are having difficulty with debt, you can contact
the National Debtline which
will be able to offer expert help and advice.
Your local Citizens Advice
can also provide you with help and advice on debt with
face-to-face advice.
You can also find additional sources of free independent advice
using the "online debt advice gateway" on DirectGov.
Where can I go for advice?
What if I am not eligible for the scheme?
The scheme is not able to help all households who are facing
repossession but there may be other alternatives that are suitable
for your situation. Please contact the Housing Advice Team
who can offer further options.
How do I apply for the scheme?
Before the "rescue" can proceed, the hardship options offered by
the Lender must have been exhausted, the assistance that the Lender
can offer include;
- Providing you with a payment holiday
- Reducing your monthly payments for a certain period.
- Offering a reduced mortgage interest rate.
- Adding any arrears onto the amount borrowed.
- Extending or changing the term of the loan.
- Converting your mortgage to interest only.
- Allowing you time to sell your home if you need it.
- Mortgage Support Scheme.
You will also need to make contact with an appropriate advice
agency if you have not already done so, to provide you with a full
financial statement, negotiate with creditors and also advise on
whether the Mortgage Rescue Scheme is right for you.
If all of the hardship options have been exhausted, your lender
is in agreement, and the financial statement shows that the scheme
is a suitable option, then a full Mortgage Rescue application is
taken by the Housing Advice Team.
Your case will then be referred to Riverside Housing Association
who are operating the scheme in Cumbria. The Housing
Association will carry out further work including more financial
work and a valuation of the property. This will help them to
decide if they can help, and if so, which of the two rescue options
will be best.
How long will the process take?
The full process will be completed in around 3 months.
What if I am not successful with the scheme?
If, at any stage the scheme will not assist you, you will be
referred back to the Housing Advice Team for advice and assistance
on other options. It is always worth asking your lender or an
advice agency such as "Shelter" or the Citizens
Advice Bureau about other help that may be available.