I pay my mortgage with benefits. Application for new interest rate has been refused. What can I do?

yves
yves Scope Member Posts: 59 Empowering
edited August 2021 in Employment and Support Allowance (ESA)
Hi ,
I have a mortgage which I manage to pay on my benefits. I was working full-time and have had the mortgage for 10 years however due to disability I lost my job. 
I have applied for a new intrest rate which will significantly lower my payments and they have come back to me saying I don't fit the criteria which is nonsense as I am managing my current payments . Is there any advice out there on this as I feel they are not helping me and I'm being discrimated?
Thank you 

Comments

  • janer1967
    janer1967 Online Community Member Posts: 21,922 Championing
    Hi and welcome to the community 

    Unfortunately this is too often the case with mortgage when your only income is benefit 

    I know it sounds crazy when you are already paying a higher amount but the interest only will be a new arrangement so will be similar to a new mortgage conditions 

    An alternative could be to discuss with your mortgage lender your difficulty in managing your current mortgage and see how they can assist 

    Don't be afraid to do this most lender come across this all the time and will have a process in place 

    It could affect your credit rating though 
  • calcotti
    calcotti Online Community Member Posts: 10,001 Championing
    edited August 2021
    Apart from appealing to their common sense (if they agree to make your payments lower you are less likely to default) I don't know whether section 11.9 of the FCA handbook may be helpful
    https://www.handbook.fca.org.uk/handbook/MCOB.pdf
  • yves
    yves Scope Member Posts: 59 Empowering
    Thank you . I have an appointment with their mortgage advisor tomorrow so I will say I am having difficulty in paying at the current intrest rate . I just feel they don't want to help at all and it's wrong they can do this 
  • yves
    yves Scope Member Posts: 59 Empowering
    Thanks Calotti, I will look through this 
  • calcotti
    calcotti Online Community Member Posts: 10,001 Championing
    yves said:..so I will say I am having difficulty in paying at the current intrest rate ..
    Whether that is helpful to say or will make them more reluctant to engage I'm not sure.
  • atlas47
    atlas47 Online Community Member Posts: 237 Empowering
    Hi @yves

    I suggest you seek advice from an Independent Mortgage Advisor (across all markets, not from a panel of Lenders).

    Your are in a very strong position, in that you have owned the property for ten years, so any mortgage, would have a very good Loan To Value (LTV).

    You can work that out, by checking sold prices, near you and what you paid for your property, ten years ago. With house inflation over that period, you will have a modest LTV.

    As suggested by OP, I would not imply/ suggest, that you will struggle with a mortgage.

    Keep us informed.

  • calcotti
    calcotti Online Community Member Posts: 10,001 Championing
    janer1967 said:..I know it sounds crazy when you are already paying a higher amount but the interest only will be a new arrangement so will be similar to a new mortgage conditions
    I don't think OP is saying they want an interest only mortgage, just a mortgage with a lower interest rate.  You are right atet they will have conditions but it is not logically to allow an existing customer a nw deal which would make it easier for them to keep up their payments (no that logic necessarily comes into it). I think the significance of the FCA document I referenced is that it allows lenders to relax normal conditions in the case of an existing borrower remortgaging provided they are not taking on new borrowing (but it's not my area of knowledge).
  • janer1967
    janer1967 Online Community Member Posts: 21,922 Championing
    I am only going from my own experience when I was unable to keep up my payments due to redundancy and then later becoming disabled and not working 

    My mortgage company put in place lower payments for a significant period to make it affordable 

    Then when I could no longer work the property was put for sale as wasn't suitable for me I was housebound there and as it was on the market and there was equity they agreed to nil mortgage payments till the sale was completed 

    I know this is entirely different situation but when I was redundant for 1 year I paid reduced mortgage payments and then made the shortfall up when I was back in work 

    All I am suggesting is that there will be a workable solution 

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