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Support for Mortgage Interest (SMI) advice

happyfella

We keep on getting messages about

Support for Mortgage Interest (SMI) and asking if we want to apply. To be honest I know nothing about it and not sure if it is a good thing or a bad thing. All i know is, they pay your interest and you pay the money back when you sell the house.

But, i would like to know if anyone has done this and if they think it is a good or bad thing and how do you apply and what do you have to do to get accepted

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Comments

poppy123456

SMI is help to pay the interest on your mortgage. However it’s just a loan which needs to be repaid back in the future. More information here https://www.gov.uk/support-for-mortgage-interest

happyfella

poppy123456 said:

SMI is help to pay the interest on your mortgage. However it’s just a loan which needs to be repaid back in the future. More information here https://www.gov.uk/support-for-mortgage-interest

I understand that but i want to know if anyone has used it and if it is a good or bad thing

poppy123456

There's never much feedback from this especially since the rules changed some years ago when it changed to a loan. With the interest rate for this being just 2.09% then it's not going to pay much at all. https://www.entitledto.co.uk/help/support-for-mortgage-interest before doing anything else you should get some expert advice.

2oldcodgers

poppy123456 said:

There's never much feedback from this especially since the rules changed some years ago when it changed to a loan. With the interest rate for this being just 2.09% then it's not going to pay much at all. https://www.entitledto.co.uk/help/support-for-mortgage-interest before doing anything else you should get some expert advice.

The old scheme you mention was brilliant. Not only did the interest being paid by the government exceed that that was actually being charged by the bank, this led to a not too small amount of excess being used to reduce the capital outstanding every week. None of these payments were to be paid back to the government. They outstandingly misjudged the amount of take up of the new scheme simply because the reduced the amount of 'interest' being paid led to a shortfall to be topped up by the claimant but also that the payments were to be treated as a loan + interest.
I must have received half a dozen letters asking me to take up the 'offer'. Instead I arranged for an insurance policy to pay off the mortgage what little there was left of it.

happyfella

2oldcodgers said:

poppy123456 said:

There's never much feedback from this especially since the rules changed some years ago when it changed to a loan. With the interest rate for this being just 2.09% then it's not going to pay much at all. https://www.entitledto.co.uk/help/support-for-mortgage-interest before doing anything else you should get some expert advice.

The old scheme you mention was brilliant. Not only did the interest being paid by the government exceed that that was actually being charged by the bank, this led to a not too small amount of excess being used to reduce the capital outstanding every week. None of these payments were to be paid back to the government. They outstandingly misjudged the amount of take up of the new scheme simply because the reduced the amount of 'interest' being paid led to a shortfall to be topped up by the claimant but also that the payments were to be treated as a loan + interest.
I must have received half a dozen letters asking me to take up the 'offer'. Instead I arranged for an insurance policy to pay off the mortgage what little there was left of it.

we still have 9 years left on our mortgage and around £50,000. we are getting letter after letter and phone call after phone call asking us to go on the scheme. We are just about managing to pay the mortgage but will struggle if it goes up anymore. our mortgage has gone up by two hundred pounds over the past 14 months. But i just dont think the scheme is right for us

2oldcodgers

happyfella said:

we still have 9 years left on our mortgage and around £50,000. we are getting letter after letter and phone call after phone call asking us to go on the scheme. We are just about managing to pay the mortgage but will struggle if it goes up anymore. our mortgage has gone up by two hundred pounds over the past 14 months. But i just dont think the scheme is right for us

The scheme is no different than paying some of your interest payments with a credit card albeit that you don't have to repay it until you either die or move.
This is the only welfare benefit apart from the Bereavement Benefit that is treated as a loan. I am still waiting to see if the likes of UC, housing benefit or maybe Carers Allowance ends up in the same position.
We all know why this happened - those that rent kicked off big style that the idea of free interest payments meant that the homeowner was protecting their equity in the home - not fair they shouted.
But renters were getting some or all of their rent paid for by the government and as such were not able to build up any equity.

happyfella

2oldcodgers said:

happyfella said:

we still have 9 years left on our mortgage and around £50,000. we are getting letter after letter and phone call after phone call asking us to go on the scheme. We are just about managing to pay the mortgage but will struggle if it goes up anymore. our mortgage has gone up by two hundred pounds over the past 14 months. But i just dont think the scheme is right for us

The scheme is no different than paying some of your interest payments with a credit card albeit that you don't have to repay it until you either die or move.
This is the only welfare benefit apart from the Bereavement Benefit that is treated as a loan. I am still waiting to see if the likes of UC, housing benefit or maybe Carers Allowance ends up in the same position.
We all know why this happened - those that rent kicked off big style that the idea of free interest payments meant that the homeowner was protecting their equity in the home - not fair they shouted.
But renters were getting some or all of their rent paid for by the government and as such were not able to build up any equity.

do you think this is worth doing. i have tried to get advice on this and no one is willing to help. I need to know if i need a loan in the future on my house if this would affect me if i take this option. and also, if taking this scheme would end up costing me more than paying the interest myself and would it result in my mortgage company saying you can no longer afford your mortgage and wanting me to pay it all in full

happyfella

Can we get someone from Scope to provide more information on this, like if it is worth it, what questions they ask on the form etc.

poppy123456

happyfella said:

Can we get someone from Scope to provide more information on this, like if it is worth it, what questions they ask on the form etc.

I think your best option is to either speak to an advice agency near you or speak to shelter. https://advicelocal.uk/welfare-benefits

https://england.shelter.org.uk/housing_advice/benefits/support_for_mortgage_interest_payments_smi

2oldcodgers

stay_positive said:

I don't understand why claimants with mortgages get next to no help to help they pay but landlords with mortgages are getting tons of help via their tenants who can claim a lot of housing benefit , landlords are getting their mortgages paid in full , makes no sense at all .

I have previously explained why. Renters kicked off big style that those with homes of their own with a mortgage were getting preferential treatment over renters. Jealousy I would say was the issue. Why should those with a home worth £100's of thousands get help to keep all of the equity.
Yes it was a fantastic system before it changed. It actually secured the capital built up in the home with the government paying all of the interest and in my case some of the capital debt as well.
The best that the government could come up with to change this was twofold. Reduce the amount they would pay towards the mortgage interest and have that help returned to them plus interest when the home is sold. Hence some of the built up equity has to be used to repay the help the government gave. It appeased the renters.

2oldcodgers

happyfella said:

do you think this is worth doing. i have tried to get advice on this and no one is willing to help. I need to know if i need a loan in the future on my house if this would affect me if i take this option. and also, if taking this scheme would end up costing me more than paying the interest myself and would it result in my mortgage company saying you can no longer afford your mortgage and wanting me to pay it all in full

With this scheme it will mean that you will have another charge in addition to the mortgage debt on the home.
Would lenders be willing to lend you money in the future? No one can say.
Personally with two charges already against the home another secure lender will make it three - not a good place to be in.

poppy123456

stay_positive said:

We may have to apply for this as our mortgage isn't being paid at all at the moment we haven't paid for six months , got no money .

You need to be claiming certain means tested benefits before you can apply. In another thread you said you were claiming tax credits, this doesn't qualify you for SMI. For those claiming UC then you must be claiming for 3 months before you can apply for SMI.

https://www.gov.uk/support-for-mortgage-interest/eligibility

stay_positive said:

I don't understand why claimants with mortgages get next to no help to help they pay but landlords with mortgages are getting tons of help via their tenants who can claim a lot of housing benefit , landlords are getting their mortgages paid in full , makes no sense at all .

I have no idea what that has to do with those unable to get help with the mortgage. I can't imagine what state the country would be in if no one could claim for help with the rent if they rent privately, that would be ridiculous.

The majority of landlords refuse to rent to those claiming benefits anyway so it's not as easy as you may think it is. If you're lucky enough to find one, a lot of the time benefits do not cover the whole rent.

I had my own home once but sadly lost that because i couldn't pay my mortgage. Marriage breakdown = no home, many many years ago.

poppy123456

Not everyone claiming help with the rent will be entitled to £89/week, some will be entitled to less, some more, it depends on each individual circumstances.

The point i'm making is renting your home is completely different to owning it.

2oldcodgers

stay_positive said:

I don't think renting is a different thing , until a mortgage is paid in full people with mortgages do not fully own their home.
the point I am making is that landlords have a mortgage or if lucky enough own outright . The point I am making is that when someone who has a mortgage and are out of work or ill , they now cannot get full help , the help they do get is a loan adding more debt to that person's woes. The example I gave is not helping anyone to stay out of debt , its adding to their debt . It isn't fair that someone with a mortgage and unfortunate to be ill or out of work cannot get decent help to pay for the place they live .People are single and on low income will definitely get £89 a week to pay towards their rent , I know many . But people with a mortgage who are on low income and receive wtc or uc only get a tiny tiny fraction of help to pay for their mortgage . All this does is put the unfortunate person into more debt and added stress of losing their homes . Not a fair system .

Where were you when the government caved into the demands from the renters that it wasn't fair that those with a mortgage were getting the help to ring fence the equity they had built up in the home?
I seem to remember that very few complained about the move to the new scheme - the renters were very opiniated and vocal.

happyfella

we have decided not to apply even though they keep sending us messages to apply. i have just checked and it says they will pay 2.65%. sadly our interest on our mortgage is 4% so it would not be worth it for me to apply

poppy123456

Just ignore the messages, you're not being forced to apply.

2oldcodgers

poppy123456 said:

Just ignore the messages, you're not being forced to apply.

Agreed The DWP/Pension Service have been banging on about this for at least the past 10 years. I presume that they cannot understand how someone receiving welfare payments is still able to maintain a mortgage.

calcotti

stay_positive said:... Does carers allowance cease to exist then and will the uc and carers element be included altogether

No, CA still exists and can be claimed. However if CA is received it is deducted from any UC payments so there is no financial benefit claiming both. So the situation is as the better part of your statement

stay_positive said:

.., or does he still receive carers each month and the uc which carers is deducted from ?

CA does not need to be received in order get the carer element of UC,

poppy123456

stay_positive said:

Well my husband officially stopped trading today , the licence to trade has ended .
We have been discussing all the pro's and con's about wtc uc and smi . It looks like we will be better off claiming uc and smi and i get pip .
I did a benefits check on turn2us , it says as a carer he will lose his carers allowance but will get carers element , I don't understand how it works , it says he gets the carers element as carers is deducted from uc . Does carers allowance cease to exist then and will the uc and carers element be included altogether , or does he still receive carers each month and the uc which carers is deducted from ?
Also does anyone know if interest mortgage arrears can be added to the smi.
We need to claim this as it will help to pay at least and we need to get the mortgage back on track .

If you do claim UC then you'll need to make sure you report your health condition and send a fit note within 7 days of this and continue to send them without any gaps until a decision is made on your work capability assessment.

As a carer your husband will not have any work commiments. However, for yourself, you will be classed as a job seeker until a decision is made on your WCA. It's a work coaches discretion whether they reduce or turn off work commiments. Some do and others don't.

calcotti

stay_positive said:

calcotti said:

stay_positive said:... Does carers allowance cease to exist then and will the uc and carers element be included altogether

No, CA still exists and can be claimed. However if CA is received it is deducted from any UC payments so there is no financial benefit claiming both. So the situation is as the better part of your statement

stay_positive said:

.., or does he still receive carers each month and the uc which carers is deducted from ?

CA does not need to be received in order get the carer element of UC,

But both cannot be claimed together , the £76.75 a week is deducted from UC and then the carers element is added ? I am so confused by it all.

Both can be claimed but the total money received be the same amount.

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