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Criteria for the Mortgage Rescue Scheme

Because of the current problems in the global financial market, many people are having problems making their mortgage payments.  They are facing the real possibility that they could lose their homes. Already the housing market in the United Kingdom has suffered large falls in value, and because of it the Government has decided to step in and offer people a chance to save their homes through the Mortgage Rescue scheme.

The scheme is designed to help up to 6,000 households who are at the most risk of losing their homes because they cannot make their mortgage payments. These families will see assistance over the next two years and if you think you may qualify for this scheme you should contact your lender or bank as soon as possible. You may be able to work out an arrangement with your lender to renegotiate your monthly payments into an affordable plan that allows you to keep your home or you could qualify for the rescue scheme. Households that are in ‘negative equity’ - when you owe more on your mortgage than your house is worth - are not eligible and residents in Northern Ireland, Wales, and Scotland should look into the schemes being offered in their respective countries.

In order to stay in your home and avoid repossession under the Mortgage Rescue scheme, you are advised to contact your lender, advice agencies or even your local court to get a reference to the local housing authority for help. If you are deemed eligible by the housing authority they will set up a meeting between you and their money advisors to develop a plan to meet your housing costs until the economy or your financial situation improves. Your home will be assessed by a Registered Social Landlord (RSL) or HomeBuy Agent, and recommendation will be made to help you through a ‘shared equity loan’ or through the ‘government mortgage to rent’ programme.

If you qualify for the shared equity loan, the RSL will pay off a proportion of your mortgage in exchange for a share of your property’s equity. The share could be anywhere between 25 and 75 percent of the total mortgage and it is based on the assessment of your household finances. This reduces your mortgage to an affordable level. If the RSL recommends the government mortgage to rent programme, they will pay off your mortgage completely and become the owners of the property. You will remain in the home as a tenant paying rent at an affordable level.

To be eligible to participate in the government’s Mortgage Rescue scheme, your household must have someone in ‘priority need’ living there. These could be:
  • An expectant mother
  • Citizens with dependent children
  • Citizens who are vulnerable due to physical or mental impairment or old age.
You also need to meet the following criteria in order to qualify:
  • All homeowners listed on the property must agree to be considered for the plan
  • You must be in some sort of debt counselling programme with agreed repayment arrangements
  • You must have discussed all other repayment options with your lender
  • Household income cannot exceed more than £60,000 annually
  • The value of the home should not be higher than the set levels for your region
  • It is impractical for you to move somewhere smaller or cheaper and you must demonstrate a clear need to stay in the home
  • The property should be suitable for your family’s needs
  • You do not own a second home in the United Kingdom or abroad
  • The value of the part of the home that you own must be enough to pay off any existing and outstanding debts
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