Support for Mortgage Interest at NAFAO Conference
"Understand the process and benefits of Support for Mortgage Interest (SMI) loans, helping homeowners on income-related benefits prevent repossessions. Learn about loan workings, communication methods, and assistance for vulnerable claimants provided by the Department for Work & Pensions."
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Presentation Transcript
Support for Mortgage Interest NAFAO conference Burlington Hotel, Birmingham, 24 May 2018
Background OVERVIEW Helps towards mortgage interest for homeowners receiving income-related benefits Objective: to prevent repossession as far as is possible FISCAL CONSOLIDATION No impact on available support FAIRNESS Balance individual need and taxpayer SUSTAINABILITY Costs rise with interest rates Help at point of need Department for Work & Pensions 2
The process Communications: Individual letters FAQ Booklet Telephone calls (Serco) No loan Take-up loan Sent loan agreement & charge form with completion guidance No further communication Benefit stops (6 weeks) Agreement & charge form returned At least 6 weeks given to consider options Benefit becomes loan payment Department for Work & Pensions 3
How will SMI Loans work? Standard Interest Rate (SIR) Applied to set limit Same level of support as with benefit Claimant Bank of England AMR 2.61% Loans can be backdated to 6 April Introduced 6 April 2018 Lender Voluntary payments at any time Current Gilt rate [1.5%] Usually secured as 2nd charge on property Payable only if sufficient equity Interest bearing loan Repaid on sale or transfer Department for Work & Pensions 4
How will LMI work? (continued) Repayable only if equity available Past payments as a benefit DWP - Loan issue, management & recovery Accepting or declining the SMI loan at any time Can be backdated to 6 April 2018 Department for Work & Pensions 5
Vulnerable claimants PROCESS Process in place to help claimants who may lack the mental capacity to make financial decisions Referral to specially trained staff ATTORNEY/DEPUTY Claimant will need representative (power of attorney/Deputy by the Court of Protection/Scottish equivalent DWP will appoint Financial Deputy/Intervener where one not in place CONTINUED BENEFIT In such cases benefit may continue until at least November 2018 Department for Work & Pensions 6
Current status All current claimants contacted by letter Telephone contact Take-up of loan and stated intention to take-up increasing DWP Focus Returned Forms Seamless Transfer to loan for claimants and lenders Factsheet available for stakeholder use Department for Work & Pensions 7
Further SMI Information Stakeholder factsheet available from DWP speak to me in today s session Visit: www.gov.uk/support-for-mortgage-interest for further information Department for Work & Pensions 8
