29 June 2009, 09/131
Don’t end up homeless - take advantage of the
Mortgage Rescue Scheme
If you are struggling to pay your mortgage and your home
is at risk of repossession, help is at hand.
West Lancashire Borough Council has signed up to the
government’s Mortgage Rescue Scheme, which has been set up to help
vulnerable families who are in danger of losing their
home.
The initiative has been launched in light of the current
recession, which is creating a challenging environment in the
housing market. A number of factors, such as rising interest rates,
mean that some homeowners are facing traumatic pressures and could
ultimately find themselves homeless.
To deal with this crisis the Council is running this new
scheme, which may prevent people from losing their homes if they
are facing the upsetting experience of repossession.
Councillor Val Hopley, Portfolio Holder for Housing, said:
"The economic downturn is having a devastating effect on homeowners
and there are so many people who a struggling to keep their heads
above water. We don’t want to see anybody become homeless, which is
why we are promoting this rescue package to prevent vulnerable
families losing their homes. There are a number of different
options, so please don’t suffer in silence as we may be able to
help you."
The rescue package has two elements:
-
Shared equity - this is to help householders who have
experienced payment shocks and need help paying the mortgage. A
housing association pays off a proportion of your mortgage. In
return they receive a share in your property’s ‘equity’ (the market
value of your home, minus the outstanding mortgage balance). This
reduces your mortgage to a more affordable level so you can
continue to make repayments
- Government mortgage to rent - this is designed to
help the most vulnerable households on low incomes with little
chance of sustaining a mortgage. The housing association will pay
off your mortgage completely by buying the property. You’ll stay in
your home and pay rent to them as their tenant. The rent will be at
a level lower than the ‘market rate’ - this will be cheaper than if
you were renting from a private landlord
The scheme can also help households who are in negative equity.
Negative equity means that your mortgage is more than the value of
your home. Households that have debts that are up to 20% greater
than the value of their home and meet the criteria can apply for
the scheme.
To be eligible for the scheme your household must include
someone in 'priority need' and earn less than £60,000 a year.In
addition, you must meet the following:
- The value of your home shouldn’t be higher than
£135,000 (although applications can be considered on a case by case
basis);
- Everyone named on the mortgage must agree to be
considered for the Mortgage Rescue Scheme;
- You must have received debt counselling and advice from a
free independent debt adviser (e.g. Citizens Advice
Bureau);
- You should have made arrangements to repay any
debts;
- You should have discussed all other options to meet your
repayments;
- You must have a clear need to stay in your
home;
- Your home must be suitable for your needs;
and
- You must not own a second home, including a home
abroad.
For more information on the scheme you can visit the Homelessness Advice & Prevention section on
the Council’s website, or visit the Direct Gov website at
www.direct.gov.uk (external
link). Alternatively, contact the team on 01695 577 177.
Related information