Mortgage Interest Payments

[onestressedwoman]

I recieved a breakdown of my SMI payment yesterday from my mortgage provider and was totally shocked

 

The DWP have been paying varying amounts to my mortgage which I was totally unaware of ! Then when I got to the last few payments made on the list they have reduced the payments by half.

 

Previously this was a fixed calculation but in July it dropped by £100 the back to normal till November now halved ?

 

Has anyone else seen this in thier payments - Shouldn't I have had notification from DWP of these reductions and a calculations.

 

Has there been a change of calculation can anyone give me the new means of calculation so I can check amounts that are being paid are correct ?

[IdaInFife]

Hiya,

 

Hopefully someone with knowledge of SMI will come along and help.

 

Ida x

[onestressedwoman]

Lets hope so Ida x

[mkb]

SMI payments dropped from 6.08% to 3.06% on 1st October. Payments are made 4 weekly in arrears. Hope that helps.

[onestressedwoman]

MKB

 

Well that makes sense for drop in payment from Nov onwards - still need to figure out why fluctuating payments before this ?

 

They really should have informed me I wonder how many other people are totally unaware of the decrease- How on earth are we going to be able to keep our properties -

 

Also when DWP first started paying my SMI I think it should have fallen under 200k allowance but I am sure it was calculated on 100k ? Do you have any idea what date 200k came into force ?

 

Thank you for your insight

 

OSW

[mkb]

We too were never been informed of the reduction in payments by DWP but thanks to CAG, we were aware of it. We are in the Mortgage Rescue process at present since we have a suspended possession order already (various reasons why we're eligible for MR) but I have no idea how some people are going to manage

 

Re changes to limits: DWP site states

Rules that apply to SMI since 5 January 2009

 

From 5 January 2009 if you were getting income-based Jobseekers Allowance, Income Support or income-related Employment and Support Allowance, most claims for SMI came under new rules including:

 

• waiting 13 weeks from the date you claim before you get SMI (this is known as a waiting period and was previously 39 or 26 weeks)
  
• being able to claim for mortgage interest on up to £200,000 of your mortgage (this was previously £100,000)
  
• getting paid SMI for up to two years only if you are getting income-based Jobseeker’s Allowance
  

There is no limit to how long you can get SMI if you are getting:

 

• Income Support
  
• income-related Employment and Support Allowance
  
• Pension Credit
  

[onestressedwoman]

I went to my local council to discuss but don't want to pass ownership of my house to the council -

No one is going to manage and all of us will be facing repossesion if we don't agree to give the council our properties I WILL NEVER DO IT -

 

Doesn't make sense if we wait to be repossessed (too many ss's) the council has obligation to house us and then qualify for Housing benefit which costs council more than toping up payments -

 

Government reasoning ???? They want our property they do not care about us !! prefer to give it back to mortgage provider (GOD FORBID)

 

I am now seriously short on payments incapacitated and cannot go to work so downward spiral for us cannot see light at the end of this tunnel !!!!!!!!!!!

 

Hey if they get my house that could pay for David Cameron to have his photograph touched up for a publicity poster 25 times given his first one cost 12k -

 

Sorry to hear you are in the position you are wishing you great fortune for the New Year !!!

 

I'm fighting on my end for money short paid to me so think of me late January as finally getting case heard after 3 years

 

MKB ? three options from my council 1. buy you out and re rent your home to you 2. shared ownership 3. cost the short fall

 

I have been told I only qualify for item 1.

 

which are you under if you can share details pm me please

Edited December 18, 2010 by onestressedwoman

[andydd]

Indeed, the reduction in SMI was something that came as a shock to many of us, I started a thread about it and this lead to me being interviewed on BBC Breakfast TV about it, it strange that it could affect many people but didnt get the same media attention as say the cut in housing benefit.

 

So from October the change in SMI is due to that but I cant really see why there should be other fluctuations in the amount you received(ed) from the DWP, it was paid at a simple flat rate of 6.08%, so assuming that you were eligib,e for benefit the whole time (mine varies slightly as I've had some short term contract jobs) then there should be no change in the amount you receive.

 

Andy

[onestressedwoman]

So the rich get richer and the poor are left homeless and destitute

 

I think that maybe it's only the young that have the right idea, they are the only ones who have unitedly protested about unreasonable changes - although the press would have you believe they are all yobs !!

 

There was a time we would all stand together to oppose such things. Solitary voices will always remain unheard

 

Where is Citizen Smith when you need him ...

[andydd]

So the rich get richer and the poor are left homeless and destitute

 

...

 

What did people expect voting for Tories ?

[onestressedwoman]

Yes Totally agree !!

 

But in the mean time we lose all we have worked to achieve - Is there no way out of this

 

My head is heavy and my heart even more so !

[andydd]

Anyway back to your original post. Yes you should of been notified by the DWP, they sent letters out but only about a week before the new rules came into effect, this short notice was waht the BBC were interested in, I was interviewed by Samantha Washington who does some of the finicial reports on BBC News.

 

Is your building society allowing you to pay interest only at the moment, at what rate is your mortgage, mine was 5.2% so the old SMI overpaid it slightly but now its not enough, luckily its a 2 year fixed rate that ends at the end of Dec and Ill go onto the standard rate which is BoE rate + 2 = 2.5% so thats not too bad.

 

The government shifted a lot of the burden onto mortgage companies and therefore they are under greater pressure to help you if you run into difficulties.

 

Andy

[onestressedwoman]

Andy

 

I never recieved any notice of change - DWP was meant to send a detailed break down to me 2 years ago and I'm still waiting for it so no surprise that I was never informed about change -

 

My mortgage is interest only and fixed @ 6.25 for 5 years 2 years left to run so no matter which way you look at it I'm stuffed - cost me £9000 to change my product if they will allow me to do so but account would have to be without arrears for this ?

 

I am going to go back through my statement provided to me by mortgage to see exactly what the varing payments amount to and try and work out how figure has been calculated

 

 

[GRUMPYOLEMAN]

There is a lot of talk at the moment saying that the variable rates are going to go up considerably in the New Year.

If that happens there will be very few people with mortgages at under 4%. This will mean that a lot more will have to find money out of their benefit.

 

The housing market is such that properties aren't selling. So that is not an option. The only saving grace is that the mortgage debt is no more than 60% of the current value. That way you can knock the price right down to get a quick cash sale, clear the mortgage and start again.

Renting does now seem to be the way forward. Not that many ordinary people can afford to own or buy property anymore.

At the end of the day it is only bricks and mortar, you can make a home anywhere.

 

I am going to be in the same boat as everyone else and am seriously looking to sell at any price just to get rid of the mortgage.

With renting at least you have the security of knowing that the rent will be paid by LHA. You just have to make sure that you don't get a too big a place, preferably in a cheaper poorer area.

I am looking at a Studio Flat just for the two of us, which is very cheap. It feels like I am back where I was in my late teens living anywhere as long as the rent was cheap! But I wouldn't like to have to put up with the neighbours as then - a couple of girls in the flat above were using it as a 'knocking shop'. All day and night - it was like a motorway service station without the cars!!! LOL

Edited December 20, 2010 by GRUMPYOLEMAN

[kingkarl1967]

Hi Folks

 

I have a meeting today with my MP over this nonsense and the hardship it is bringing to my family , I was wondering if we could start a proper facebook campaign over this and get as many people together as possible to help start a fight against this.

Well let you all know what is happening later and please post your ideas as this cannot continue.

[honeybee13]

I hope it goes well for you. Please let us know afterwards.

 

My best, HB

[mkb]

There is a facebook page but it hasn't got any momentum. We could all join & raise the profile??

 

http://www.facebook.com/#!/SMICUT

[kingkarl1967]

Well the meeting went well (NOT) just a standard bull reply that basically said tough !

I really think I have just about had enough of been bent over a barrel this year what with my income support appeal that I won at least but now this worry.

I think its nigh on time the people in the UK that are suffering through these cuts that we all get together like the students and maybe even team up together violence or not they don't seem to listen so what the hell.

There is big big trouble brewing in this country and even more so when they try to force people to work for their benefits next year.

All I can see is total anarchy brewing in the UK

[andydd]

All I can see is total anarchy brewing in the UK

 

Didnt someone write a song about that ?

[onestressedwoman]

There is a lot of talk at the moment saying that the variable rates are going to go up considerably in the New Year.

If that happens there will be very few people with mortgages at under 4%. This will mean that a lot more will have to find money out of their benefit.

 

The housing market is such that properties aren't selling. So that is not an option. The only saving grace is that the mortgage debt is no more than 60% of the current value. That way you can knock the price right down to get a quick cash sale, clear the mortgage and start again.

Renting does now seem to be the way forward. Not that many ordinary people can afford to own or buy property anymore.

At the end of the day it is only bricks and mortar, you can make a home anywhere.

 

I am going to be in the same boat as everyone else and am seriously looking to sell at any price just to get rid of the mortgage.

With renting at least you have the security of knowing that the rent will be paid by LHA. You just have to make sure that you don't get a too big a place, preferably in a cheaper poorer area.

I am looking at a Studio Flat just for the two of us, which is very cheap. It feels like I am back where I was in my late teens living anywhere as long as the rent was cheap! But I wouldn't like to have to put up with the neighbours as then - a couple of girls in the flat above were using it as a 'knocking shop'. All day and night - it was like a motorway service station without the cars!!! LOL

 

Hey but my home is not bricks and mortar to me foolish as it may seem to some, the heart of our family is our home - there are only two of you -

[Ronni2011]

The changes were announced in the budget.

 

I have a problem though. I didn't know about the change to mortgage interest rates. No letter from the DWP. And they didn't alter the mortgage rate they were paying either. They just carried on paying the money to the lender as normal. This week I get a letter from the DWP. We have overpaid you and have asked your lender to refund them with the £500 overpayment. The Lender then wrote to me saying we have had a request from the DWP to refund an overpayment of £500 and have honoured this. Please let us have a payment of £500 within the next 7 days or your mortgage account will go into arrears. No one told me about this or asked my permission. They just took it back and told me afterwards. And it was their mistake. I have had no contact with the DWP for ages and my circumstances had not changed.

 

I am going to complain/appeal. And I am hopeful the lender will agree to accept payment in instalments. Thankfully I have now found work [after 3 years on incapacity benefit] but this sort of thing should not be allowed to happen!!

 

Just wanted others to know about it.

[onestressedwoman]

The changes were announced in the budget.

 

I have a problem though. I didn't know about the change to mortgage interest rates. No letter from the DWP. And they didn't alter the mortgage rate they were paying either. They just carried on paying the money to the lender as normal. This week I get a letter from the DWP. We have overpaid you and have asked your lender to refund them with the £500 overpayment. The Lender then wrote to me saying we have had a request from the DWP to refund an overpayment of £500 and have honoured this. Please let us have a payment of £500 within the next 7 days or your mortgage account will go into arrears. No one told me about this or asked my permission. They just took it back and told me afterwards. And it was their mistake. I have had no contact with the DWP for ages and my circumstances had not changed.

 

I am going to complain/appeal. And I am hopeful the lender will agree to accept payment in instalments. Thankfully I have now found work [after 3 years on incapacity benefit] but this sort of thing should not be allowed to happen!!

 

Just wanted others to know about it.[/QUO

 

If the overpayment was thier fault it cannot be demanded you should have recieved a letter from DWP not saying they were taking the money but informing you that they had made an error write to them tell them it was thier error not yours ! They cannot demand the money back like that ask for the figures (which I doubt you'll get) They cannot reclaim funds that were issued due to thier error only if you have made a mistake !

 

If they are adamant that money has to be repaid then they should have made a payment arrangement with you.

 

Make sure you highlight it was thier error in your letter !!!!!!!!!!!!!!!

 

Don't know where in the country you are but I have a direct dial number which maybe of use

 

PM me if required

 

OSW

[Ronni2011]

thanks for that and will PM you for that number. I am down in Devon. I was just shocked by the way they did this. And I have had no correspondence or requests for information from the DWP. My mortgage details haven't changed [i am on a fixed rate mortgage deal]. It was their mistake. It wouldn't have been quite so bad had they written first and told me this had happened and what they were going to do. They just sent me a copy of the letter of request for repayment to the mortgage lender, next day or so I got the letter from the building society. They didn't ask me either. They just paid it back to the DWP. So yes I intend to complain. To both of the DWP and the Lender. I am back at work now, but that's not the point. They overpaid me for 3 months I think it worked out at, but yet I have to pay back £500 in 7 days which is enough to cause anyone hardship!! I actually didn't think they were allowed to do that if it is was their mistake not mine. The DWP knew the rates had changed so why did it take them 3 months to realise they hadn't altered my interest payments? And because they don't tell you what they're paying other than that one letter a year how are you supposed to even know its happened?

 

Thanks for that and will let you know what happens. Incendentally when I first made my claim for mortgage assistance the DWP messed up. It took them over a year to sort it out. I had to borrow money to keep my mortgage going so I wouldn't get repossessed. I wrote and complained then and they ended up having to pay me compensation of just over £1000 as it was their error. So I think I will suggest they should do the same thing now.

 

Honestly it is hard enough managing on the pittance they pay you without all of this as well.

[onestressedwoman]

My Lord thar sounds like a familar story DWP didn't pay my SMI for 3 years still fighting to get some of it paid however the interest on credit I used to pay the mortgage far out weighs what they owe me !

 

Considering putting application in for consiquential cost but not sure if Tribunal are able to make judgement on that !

 

Stresses me out so much as if my personal circumstances are bad enough ! Hey hope work goes well for you

[Ronni2011]

The DWP didn't pay my mortgage interest for a year [plus the usual waiting period]. I complained and applied for a special payment I think they called it. I don't have the paperwork to hand but it was dealt with internally by the DWP. They agreed they'd messed up and I was awarded compensation [and paid all the money I was owed] of about £1200. That was about 3 years ago now. Looks like they are trying to take some of it back!!!! At the time I just wrote to the DWP saying I wanted to make a complaint for their maladministration. Can't post links on here yet but google DWP special payments scheme.

 

I must have read through something like that - and sent them copies of all the letters I'd written etc etc. I actually just wrote a letter of complaint to get it sorted - they told me about the special payment scheme themselves and I was awarded compensation. So might be worth looking into. I am considering doing the same thing about this - it has caused me financial hardship and it was their mistake not mine. They knew the rates had changed, they didn't alter my benefits, I did nothing wrong. I am also considering making a complaint to the Mortgage Lender and quite possibly [if it is not resolved, to the Financial Ombudsmen] because I don't think the Mortgage company should have paid money to a third party without my knowledge or consent. It is my account and surely it is up to me whether I repay the DWP or not [and for me to face the consequences of not doing so obviously]. And if I chose to repay the DWP surely they should have given me the opportunity to do so by way of instalments, not take all in one go and put my mortgage account in arrears [for the first time ever - I borrowed money when I was ill to keep on top of the payments].

 

Couldn't PM you by the way OSW as I am new to the forums and not posted enough yet!!! Did try.