WHAT IS THE MORTGAGE RESCUE SCHEME?
The Mortgage Rescue scheme is a government scheme that may help
if you are having serious difficulties making your mortgage
repayments and are in danger of becoming homeless if
repossessed.
If you are eligible, you could get help to stay in your home. As
a resident of Forest Heath District Council, you make your
application for help from the scheme to Forest Heath.
WHO CAN GET HELP FROM THE MORTGAGE RESCUE SCHEME?
To be eligible for the scheme your household must include
someone in 'priority need'. This could be:
- a pregnant woman
- someone with dependent children
- someone who is vulnerable because of old age or a physical or
mental impairment
You'll also need to meet the following criteria:
- your household must earn less than £60,000 a year;
- the value of your home shouldn't be higher than certain levels
set for each region - for our region the level is £200 000;
- everyone named on the mortgage must agree to be considered for
the Mortgage Rescue scheme - although you don't have to sign a
written agreement;
- you must have received debt counselling and advice from a free
independent debt adviser at an organisation like the Citizens
Advice Bureau or Shelter;
- you should have made arrangements to repay any debts;
- you should have discussed all other options to meet your
repayments with your bank or mortgage lender;
- you must have a clear need to stay in your home, which means
it's not practical or reasonable to move somewhere smaller or
cheaper;
- your home must be suitable for your needs - for example,
there's not too many people sharing the same space making it unsafe
and unhealthy;
- you must not own a second home, including a home
abroad.
HELP FOR PEOPLE IN NEGATIVE EQUITY
You may be eligible for help from the Mortgage Rescue scheme if
you are in 'negative equity'. This is when the amount owed on your
mortgage is more than the value of your home. If you are in
negative equity, you can apply for the scheme if:
- you meet all the other eligibility criteria;
- the value of your mortgage (and any loans taken out against
your home) is less than 120% of the value of your home.
HOW THE MORTGAGE RESCUE SCHEME WORKS
You can be referred to the scheme by:
- advice agencies, like the Citizens Advice Bureau or
Shelter;
- your mortgage lender;
- the courts
- or you can also contact Forest Heath District Council directly
to get advice about the Mortgage Rescue scheme.
When you apply for help from the scheme:
- the council will arrange an appointment for initial advice and
assistance;
- you may be referred to the Citizens Advice Bureau for money
advice;
- the council may arrange an assessment of your home;
- you may get financial help, either with a 'shared equity loan'
or through a 'Government mortgage to rent', depending on your
circumstances.
SHARED EQUITY LOAN
The council may involve a Registered Social Landlord (RSL) - an
independent housing organisation registered with the Homes and
Communities Agency. The RSL can provide a shared equity loan, which
means they will pay off a proportion of your mortgage. In return
they receive a share in your property's 'equity' - the market value
of your home minus the outstanding mortgage balance. The RSL will
agree on the proportion, which will be based on an assessment of
your household's finances. This will reduce your mortgage to a more
affordable level so you can continue to make repayments.
GOVERNMENT MORTGAGE TO RENT
Alternatively, the RSL may suggest a Government mortgage to
rent, which means the RSL will pay off your mortgage completely by
buying the property. You will stay in your home and pay rent to the
RSL as their tenant. The rent will be at a level lower than the
'market rate' - this will be cheaper than if you were renting from
a private landlord.
You will continue to receive advice after you have entered the
scheme to help you manage your finances.
To make an appointment or to discuss the scheme.
FURTHER INFORMATION
Useful web sites