Help and Welfare Benefit Advice for Home Owners
Introduction
We are aware that some of our home owners have had their homes repossessed because they could not afford to pay their mortgages.
Home owners who are experiencing difficulties paying their mortgages are less likely to lose their homes if they seek advice early. We know that some owners will struggle on when faced with financial difficulties and hope the solution is around the corner. However struggling along can increase the problems which can be avoided by getting early advice.
Failure to get the appropriate advice and help when experiencing difficulties paying the mortgage can lead to:
· Increased stress / anxiety
· Illness
· County Court Judgements leading to poor credit rating
· Difficulty obtaining credit in the future
· Loss of the home
SMART Money Team
Our SMART Money Team can provide independent debt advice, budgeting skills, advice on welfare benefits and referrals to specialised help where necessary:
Alison Burge – Money Adviser Lucy Egan – Benefit Adviser
· Budgeting / · Support for Mortgage Interest· Debt Advice / · Council Tax
· Mortgage Arrears / · Housing Benefit
· Welsh Water Assist / · Welfare Benefits
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Alison and Lucy are here to help YOU!
Please do not hesitate to contact them on 02920 675800 and ask for SMART Money or email the team on -
Details of our SMART Money Team can be found on our website:
http://www.hafod.org.uk/money-and-benefit-advice/hafod-smart-money-team.htm
Contact your Mortgage Lender
If you are experiencing difficulties with your mortgage payments you should as your first point of call speak to you mortgage lender. Lenders should discuss with you a number of options before seeking to repossess your home including:
· Payment holidays
· Extending the length of the mortgage
· Switching to an interest only mortgage
The earlier you speak to your mortgage lender the better.
If you are not happy about the advice you have received from your mortgage lender you should make a formal complaint.
If you are still unhappy about your mortgage lender you can contact the Financial Ombudsman Service:
· Telephone the consumer helpline on 0300 123 9 123 or 0800 023 4567
· Monday to Friday – 8am to 6pm and Saturday – 9am to 1pm
Check if your are entitled to any Welfare Benefits
Support for Mortgage Interest (SMI)
Home owners who are in receipt of specific welfare benefits may be entitled to some help towards your mortgage payments. Depending on your income and your circumstances you may be entitled to Support for Mortgage Interest (SMI).
Who is entitled to Support for Mortgage Interest (SMI)?
You may get help with mortgage interest payments as part of your benefits, if you are a homeowner and are getting:
· Income Support
· income-based Jobseeker’s Allowance
· income-related Employment and Support Allowance
· Pension Credit
You will only get help towards mortgage interest payments fora mortgage or loan to buy or improve your home. SMI is normally paid directly to your lender. There is no guarantee that you will get SMI for a loan you take out.
What Support for Mortgage Interest (SMI) does not cover
SMI cannot help you pay:
· the amount you borrowed (only interest on the mortgage is paid)
· anything towardsinsurance policies you have
· mortgage arrears
When can I receive SMI?
People over the age of 60 who are claiming Pension Credit are entitled to help immediately but there are waiting periods for everyone else.
If you are eligible because you are claiming; Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance or Pension Credit payments normally start 13 weeks after you started claiming - this waiting period may be reviewed by the Government from January 2013.
There is no limit to how long you can get SMI if you are getting:
· Income Support
· income-related Employment and Support Allowance
· Pension Credit
How SMI is calculated
The standard interest rate set within SMI is equal to the Bank of England’s published monthly average mortgage interest rate.
The current rate (March 2012) is 3.63 per cent. For an updated figure you are advised to check the Bank of England’s website:
http://www.bankofengland.co.uk/Pages/home.aspx
It is unlikely that the amount you receive will allow you to pay much, if any, of the capital you originally borrowed. In some cases some people will not receive enough to cover their mortgage interest payments, increasing the risk of mortgage arrears.
Capital Limits
It may be possible to claim help with interest payments on loans up to a value of £200,000, or £100,000 if you are receiving Pension Credit.
If you were claiming SMI as part of another means tested benefit in the 12 weeks before you claimed pension credit, you may still be able to claim help on loans up to £200,000.
You can't apply for any benefits to cover the capital you originally borrowed or any investment that is linked to your mortgage (such as an endowment policy, pension or ISA). You can ask your lender for a statement of your mortgage costs and how much of what you pay is interest.
However, if you got your mortgage after you started claiming benefits, you may not be eligible. If you already had your mortgage, but increased it after you started claiming, you will only get interest payments on the amount you originally borrowed.
Claiming benefit and getting your questions answered
Contact Jobcentre Plus or The Pension Service to:
· check your eligibility
· ask any questions about this help that you may have
· ask forthe leaflet IS8 'Home owners – help with housing costs'
When you apply for income support, income based jobseeker's allowance or pension credit you will need to include information about your mortgage and housing costs in order to get the extra payments. You will have to provide proof of your income, details of your financial situation and any related paperwork. Your lender will have to complete some of the forms confirming the details of your loan.
Housing benefit and support for mortgage interest
Housing Benefit only covers rent payments, so you can't claim housing benefit to pay your mortgage. However, if you bought your home through a shared ownership scheme, you may be able to get housing benefit to help pay the rent on the share you do not own.
Discretionary Housing Payment
Each housing/council tax benefit department is given a pot of money each year to help people who qualify for housing or council tax benefit, but are having trouble paying their rent or council tax. The council decides who should be given the payments. When the money for the year runs out, no more payments can be made.
Discretionary housing payments (DHP) may be paid weekly, or can be a lump sum. They may also be backdated.
Discretionary Housing Payments generally do not help towards mortgages. However, if a homeowner is struggling to pay and is in receipt of Council Tax Benefit they might succeed in gaining a lump sum payment.
Housing Benefit
Experiencing difficulties paying Site Service Charges?
Service Charges are those services agreed and paid on your behalf and for which you required to pay. These can include:
· Site services including;
o Communal gardening
o Window cleaning
o Communal cleaning
o Removal of bulky refuse
o Communal heating
o Communal electricity to cover lighting etc in common parts
o Communal lift related costs
o Door entry systems
o Communal laundry facilities
o Warden services (Retirement schemes)
· Repairs and maintenance to common parts if you live in a flat
· Insurance paid under the terms of your lease
You may be entitled to claim housing benefit for the following housing related costs:
· Service Charges
· Rent or Ground Rent if your lease is less than 21 years
Housing Benefit is claimed from your local authority.
Other Welfare Benefits
Experiencing difficulties paying other housing related costs?
If you are entitled to the following benefits you may be able to claim for other housing related costs:
· Income Support
· Income Related Job Seekers Allowance
· Income Related Employment Support Allowance
· Pension Credit
If you are entitled to the benefit listed above you may be entitled to claim a contribution towards paying the following housing related cost:
· Rent or Ground Rent if you have a lease of more than 21 years.
Council Tax
Can’t afford your Council Tax?
If you are on a low income you may be entitled to claim for Council Tax Benefit to help pay your Council Tax.
Council Tax Benefit is subject to the following criteria:
· You are liable for Council Tax for the home you are resident
· Your income must be low enough
· Unless you or your partner are getting the guarantee credit of pension credit, your savings and other capital must be £16,000 or less
· Students are not usually entitled to Council Tax Benefit but there are some exceptions to this rule. For further details contact your local Council Tax office.
You may be entitled to a Second Adult Rebate where you share your home with anyone on a low income who does not share liability for council tax with you and who does not pay you rent.
Council Tax is claimed from your local authority.
Contact Information
Hafod Housing Association
St Hilary Court
Culverhouse Cross
Copthorne Way
Cardiff CF5 6ES
Tel 029 2067 5800
Website www.hafod.org.uk
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