The current global economy is in bad shape
and many homeowners have been facing losing their homes because of loss of income. The government has decided to step in with the eight largest lenders agreeing to support the new Homeowner Mortgage Support Scheme. Many people who are facing foreclosure and repossession of the homes may have the opportunity to save their homes. The new scheme will enable families that have experienced a significant and temporary loss of income due to the economic downturn the chance to defer part of their interest payments on their mortgage for up to two years. The government of the United Kingdom will guarantee the deferred payments in return for the banks’ participation in the programme.
- The scheme became available to homeowners in the United Kingdom on 16 January 2009 thanks to the cooperation of the lenders with the government. According to the Chancellor, “This is real help for homeowners at risk of repossession through no fault of their own. The scheme will give people who face a temporary fall in their income the confidence that they need to rearrange their finances so they can come through a difficult period without losing their home."
The eight lenders that are involved in the scheme include HBOS, Nationwide, Abbey, Lloyds TSB, Northern Rock, Barclays, RBS, and HSBC. The deferred payment is going to be rolled up and added back into the principle, with the borrower paying the deferments off when their financial circumstances allow. It allows the homeowners to maintain an affordable monthly payment while extending the term of their mortgages.
The package is available for homeowners who meet eligibility criteria.
The package has two elements. The shared equity programme is designed to help homeowners who have experienced payment shock of some form and need help paying their mortgages. The Government Mortgage to Rent programme is designed to help the most vulnerable homeowners on low income with little chance of maintaining their mortgage payments. The programmes are being operated by the government and the local authorities, Registered Social Landlords (RSL), the lenders involved, and debt advice
agencies. Shared equity participants will be awarded an equity loan
that will lower the repayments, and the Government Mortgage to Rent participants will have their mortgages cleared completely. The homeowner will then pay rent to the RSL at a rate they can afford.
The scheme is expected to help over 6,000 families retain their homes over the next two years. Because of the cooperation between the government, local governments, and communities, the rescue plan has been able to be implemented quickly. Currently there are 80 local authorities that have been delivering the rescue scheme on a fast track basis.
If you feel you can qualify for the mortgage rescue scheme, you are advised to contact your local council for more information. They will be able to direct you to the appropriate authorities so that you can submit an application for financial help. There is no reason for you to lose your home if you are eligible for help through the mortgage rescue scheme.One of our advisors will be able to help you with this.