Struggling To Pay The Mortgage

Posted on: 16 September 2008 by Gareth Hargreaves

Independent Financial Adviser Peter McGahan advises whether income support can help if you are having difficulty meeting mortgage payments.

"I am in mortgage difficulty and wanted to ensure my mortgage payment is met. I have heard that I may be entitled to support after the income support for mortgage interest legislation (ISMI). Is this true?"

Peter advises:

An overhaul has recently been announced in order to help the vulnerable meet their mortgage payments. The changes are likely to come into effect in April 2009 but may change because as yet the government are not confirming if they are indeed final. However I will take you through the changes as we stand.

Currently at present only those individuals receiving Income Support, Pension Credit and income-based Jobseeker’s Allowance are eligible for ISMI.

It is intended that as of April 2009 the eligibility criteria will be extended to individuals who receive income-related Employment and Support Allowance.

If you lose your job today you have to wait 39 weeks before you receive any support for meeting mortgage interest payments. That waiting period will be cut to 13 weeks for new working age claims - for individuals aged 16 to 65.

There will be a capital limit for the maximum mortgage less arrears under which you can claim and that will be increased by 75 per cent to £175,000 for new working age claims.

There will also be a time limit of two years but this is for new Jobseekers allowance only.

This will not apply to existing claims or to new claims from those in receipt of Income Support, income-related Employment and Support Allowance, or Pension Credit.

If you are a pensioner getting pension credit, there's good news as you will not have to wait to get help and if you are in any special circumstances, you will have a shorter waiting time.

In your situation however you along with any claims until April 2009 will be treated under the existing system.

If you are struggling with payments, act quickly and speak to your lender, they are there to help you and take it from me do not want a portfolio of repossessed properties on their hands. Speak to them first. Do a budget planner. Stop unnecessary payments. Pay the important bills first, not those who shout loudest. The priority bills are those who can take legal action such as any loan secured against your house, rent, council tax, water, gas, electricity, unpaid fines, hire purchase, and of course your phone if you are reliant upon it.

Seek advice at the Citizens Advice Bureau before paying expensive legal bills, the staff are well experienced in the matter and are non judgemental as well as supportive. Finally speak to an independent mortgage broker who is prepared to give you an initial free consultation but also who offers you a fee option. This way you can be guaranteed they will not be motivated to 'sell' you a product.

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