Mortgage Rescue Scheme Who Qualifies
The mortgage rescue scheme is a goverment scheme run by a local council housing society and if eligible is much better than the sale to rent scheme. To be eligible for the mortgage rescue scheme there has to be somebody in the household that has a priority need. This could be a pregnant woman, someone with dependant children or somebody who is vulnerable due to old age a physical or mental impairment.
The are other criteria that need to be met and the main ones are listed below.
Your household earns less than £60,000 per year
You do not own a second home including one abroad
The value of your mortgage and any other loans taken out against your property do not exceed 120% of the properties value
The value of the property is not higher than certain levels set for the region. The local council will tell you the level for your area.
There are other criteria that you will need to meet in order to be accepted and you local housing authority will talk you through these. When you apply for help from this scheme the first thing that will happen is that the council will arrange for you to meet with one of their money advisors.
The council will also involve a registered social landlord (RSL), which is an independant housing organisation that is registered with the tenant services authority. The RSL can provide different types of financial help depending on your circumstances.
Shared equity loan
The RSL can provide an equity loan to reduce your monthly repayments. You’ll pay a low monthly interest-only charge on the loan. You’ll need to have at least 25 per cent equity in your property to qualify for the equity loan. This means your mortgage isn’t worth more than 75 per cent of the property’s value.
Government mortgage to rent
The RSL may suggest a Government mortgage to rent, which means the RSL will buy your home for 90 per cent of its market value. You’ll stay in your home and pay rent to the RSL as their tenant. The rent will be 20 per cent less than the market rate for your area.
If eligible this is probably the best scheme that you could enter into and will cause you a lot less stress than the other schemes out there