Subscribe Feed (RSS)Mortgage safety net for struggling homeowners
December 4th, 2008 by jamie | Filed under Daily News, Money Management, Mortgages, Recession.Homeowners who fall behind with their mortgage repayments after losing their jobs or suffer a drop in income can take up to a two-year repayment holiday under a new Government backed scheme.
Announced in the Queen’s Speech, banks and building societies making up 70% of the mortgage sector have signed up to the scheme.
The Government and lenders still need to iron out the final detail but the outline of the plan is:
· Mortgage payers who are made redundant or face a significant income loss will qualify
· Loans up to £400,000 are covered by the scheme
· Lenders will manage the scheme and make decisions based on common guidelines about granting repayment holidays
The scheme comes in to force in the New Year.
By then the details should be clearer, like exactly what a ‘significant loss of income’ amounts to and whether the self-employed are also covered.
The objective is to reignite confidence in the housing market and reduce the number of repossessions.
The Council of Mortgage Lenders, that represents the UK’s bank and building society lenders, speculated that repossessions could rise to 75,000 next year. The CML estimates that repossessions will end up at about 45,000 properties for 2008.
The CML has welcomed the government’s safety net scheme, and promises that ‘won’t pay’ borrowers will not be able to avoid their responsibilities.
“Instead, it will provide welcome reassurance to the vast majority of borrowers that the government and lenders are doing all they can to help keep people in their homes,” said a spokesman.
British house prices tumbled at a record 16.1% in November, according to figures released by the Halifax showing that prices fell 2.6% in November compared to October, and are now 16.1% lower than in November 2007.
For More information on specific Banks use these links
- Alliance & Leicester
- Barclays
- Capital One
- Child Trust Fund
- First Direct
- HSBC
- Post Office
- Tesco Savings
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Tags: Borrowing, House Price, House Prices, Loans, Loss of Income, Mortgage Lenders, Mortgages, Repayment
