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With so many rises in energy bills and people facing unemployment, it is no surprise that more and more people are experiencing serious financial difficulty including problems paying their mortgage, which has resulted in many people being faced with losing their home. The Government have many things in place to help people on a low income that rent their home but the question is as to whether they can help homeowners in time of need. Well firstly, yes there are things that can be done, but you need to fit a certain criteria before you can even be considered for any help. If you have a mortgage payment protection insurance policy in place then you will need to contact them and put a claim in before you can request help from other course, including Government help.
If you are having difficulties due to redundancy or unemployment due to an accident or illness then the first thing you need to do is sign on to unemployment benefits and find out what other help or benefits you may be entitled to. Unfortunately help for homeowners has significantly tightened up in recent years, with a limited amount available to help people with paying their mortgage. Essentially, the Government will not help anyone to pay off a loan that ultimately results in them owning their own home – however what they will do is help people in certain situations to pay the interest on their mortgage. If you are accepted for help, then you will either have to find the rest of the money yourself to pay off the capital element or speak to your lender about switching to an interest-only mortgage, at least until you are back on your feet.
There are also many restrictions however, as the Government will only pay interest on the first £200,000 and at an interest rate set by the Government – not by what your current rate may be with your lender. To be considered for any Government help, you need to be currently claiming a Government benefit such as income support, pension credit or jobseeker’s allowance, so if your circumstances have suddenly changed, it is important to contact your local benefits advisor as soon as possible otherwise there could be a delay in processing your claim or having any money backdated. If you do not take action or communicate with your mortgage provider you could find yourself at risk of losing your home to repossession and may need to consider selling your house quickly to avoid the consequences associated with losing your home.
You also need to be aware that unless you are claiming pension credit, you will not receive any help towards your mortgage interest until 13 weeks after claiming benefit. It will also be limited to two years for people claiming job seekers allowance but there is no limit for anyone claiming other eligible benefits. And there is no need to worry about claiming everything separately as your eligibility will automatically be considered if you apply for any income related benefit and obviously once these benefits stop, your payments to your lender will also stop.
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