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| CURRENT SECTION :: Money News | |
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Last month, Prime Minister Gordon Brown’s promise to allow mortgage holders to defer mortgage payments for up to two years if they suffer a “significant drop” in income was broadly welcomed, particularly by the many contractors facing an imminent end to their contracts. But nearly a month on, many of the measures still lack detail, leaving many wondering whether they will help at all. The Homeowner Mortgage Support Scheme involves the government guaranteeing home owners’ mortgage interest payments to lenders for up to two years whilst “they get their family finances back on track,” according to Brown. But new estimates released by housing minister Margaret Beckett suggest the scheme is likely to benefit just eight to nine thousand home owners – a drop in the ocean of the estimated 75,000 who are likely to face repossession in the coming year. In new eligibility details released by the Treasury, it has emerged the scheme will not cover those with savings of more than £16,000, or those with a mortgage of more than £400,000. Nor will it cover second homes or buy-to-let properties, as highlighted by CUK on December 5. Those participating in the scheme will not be eligible for Income Support for Mortgage Interest (ISMI) scheme, which pays the mortgage interest for those out of work. Most importantly for contractors, those applying for help under the new scheme will face means-testing for “the long term sustainability of their financial position”. But it is not clear how the sustainability of an applicant will be assessed. Nor is it clear how applicants would meet the criteria that their loss of income must not be “permanent”. It also appears that no one will be eligible to have their full monthly interest payment covered – they will still be expected to pay something towards the mortgage. Again, how this ability is assessed, or how much would be an acceptable amount, is not answered. Chris Eagle, commercial manager at price comparison website CreditChoices.co.uk, said: “The details that have so far been released are incredibly vague and pose twice as many questions as they answer.” Graham Taylor Dec 17, 2008 Email this article Printer friendly page Previous Page
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