subject: What should you do in the event you are in danger of losing your UK home? [print this page] What should you do in the event you are in danger of losing your UK home?
Home owner loan Rescue Scheme and Your Residence: The Facts
You cannot pay your mortgage loan; letters from your financial institution threatening to repossess your residence litter your kitchen table. This is the headache of all homeowners; specifically house owners having a family to provide for. Regrettably the housing and credit crisis has sent a lot of families to this situation. There are no quick fixes should you are at risk of losing your home. But there are government programs you can join to safeguard your home, and steer clear of foreclosure.
One of these programs will be the Home owner loan Rescue Scheme. This scheme was created in January last year; it helps vulnerable groups like families with dependent children, the elderly and other groups that could be entitled to homelessness aid if their home is repossessed.
What must you do in the event you are in danger of losing your home?
Speak to your lender. Explain your position, and ask for help. Help can mean a loan modification that reduced monthly bills by decreasing rates of interest, increasing the loan's term, or lowering the mortgage's balance. Some loan companies will probably also provide a forbearance period where you do not have got to pay your property finance loan to allow you to sort out your financial plans.
What can the House loan Rescue Scheme do for you personally?
The home finance loan rescue scheme has two options: the Government Property finance loan to Rent program, and the Shared Equity program. The Govt Property finance loan to Rent is for vulnerable individuals and their families who cannot pay for their mortgages. The govt assigns a Registered Social Landlord (RSL) to purchase the home from the homeowner and rent it back to them for an amount they may find the money for. Any kind of money left after paying for the home loan and other loans attached to the house could be used to pay other household debts. Under this program the home owners no longer owns the property, but can continue to are living in it.
Shared equity is a less drastic program. It is for house owners that may continue to pay their home owner loan if their payments are lowered to match their earnings. The govt assigns a Registered Social Landlord to grant the home owners a bank loan that is used to reduce mortgage payments.
What is the timeframe for the Home finance loan Rescue Scheme?
It all depends on each case, but in the event the RSL and the financial institution come to an agreement it all may be closed in four to twelve weeks.
Will this affect other benefits?
No. The Property finance loan Rescue Scheme does not affect a homes eligibility for other benefits. The only exception is in the case of Shared Equity loans where entitlement for Support for Home finance loan Interest (SMI) is reduced to reflect the new mortgage loan.
As you can see this scheme is not for everyone. In all likelihood you will probably lose ownership or command over your house; although you and your family may continue to have a home in it. This is not a program for borrowers who won't pay their loans, but for those who want to keep their houses but can't.
