Homeowner help extended
By politics.co.uk staff
The government is about the extend the help it offers homeowners as repossessions look set to soar through 2009.
The Support for Mortgage Interest (SMI) scheme was today extended to mortgages up to £200,000 and will be available to people after 13 weeks from claiming – instead of the previous 39 weeks.
Repossessions are expected to hit 75,000 in 2009 – compared to 45,000 in 2008 and 26,200 in 2007, according to figures from the Council of Mortgage Lenders (CML).
The changes will apply to those already waiting for SMI, so those who have applied before October 6th will now be eligible.
Vulnerable groups will also be allowed to claim 50 per cent of their entitlement before the 13-week deadline.
James Purnell, secretary of state for work and pensions, said: “We have changed the rules to make sure even more people can get help with their mortgage payments if they lose their job. We have brought in changes as quickly as possible so people don’t have to wait too long for this support.
“Every time someone loses their job it is a personal tragedy.”
SMI is paid directly to lenders by the Benefits Agency and is aimed at those who are unemployed or on very low income.
The extension of SMI comes on top of other moves by the government to reduce the number of repossessions in 2009 – including allowing homeowners to defer half of their interest payments for up to two years, with the government guaranteeing that amount for the borrower if the customer defaults.
People participating in the scheme will also not be able to take advantage of SMI.
Other initiatives include a £200 million Mortgage Rescue scheme to aid 6,000 vulnerable households avoid repossession through local authorities taking a slice of the equity of a property and ensuring mortgage repayments are cut.
