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Government Mortgage Rescue Scheme

What is the Mortgage Rescue scheme?

The Mortgage Rescue scheme is a government scheme that may help if you are having serious difficulties making your mortgage repayments and are in danger of becoming homeless if repossessed.

If you are eligible, you could get financial help to stay in your home. As a resident of Thurrock, you make your application for help from the scheme to Thurrock Council.

Who can get help from the Mortgage Rescue scheme?

To be eligible for the scheme your household must include someone in 'priority need'. This could be:

• a pregnant woman
• someone with dependent children
• someone who is vulnerable because of old age or a physical or mental impairment

You'll also need to meet the following criteria:

• your household must earn less than £60,000 a year;
• the value of your home shouldn't be higher than certain levels set for each region - ask your council about the level for your area;
• everyone named on the mortgage must agree to be considered for the Mortgage Rescue scheme - although you don't have to sign a written agreement;
• you must have received debt counselling and advice from a free independent debt adviser at an organisation like the Citizens Advice Bureau or Shelter;
• you should have made arrangements to repay any debts;
• you should have discussed all other options to meet your repayments with your bank or mortgage lender;
• you must have a clear need to stay in your home, which means it's not practical or reasonable to move somewhere smaller or cheaper;
• your home must be suitable for your needs - for example, there's not too many people sharing the same space making it unsafe and unhealthy;
• you must not own a second home, including a home abroad.

Owners of freehold and leasehold properties who meet these criteria are also eligible for the Mortgage Rescue scheme.

Help for people in negative equity

You may be eligible for help from the Mortgage Rescue scheme if you are in 'negative equity'. This is when the amount owed on your mortgage is more than the value of your home. If you are in negative equity, you can apply for the scheme if:

• you meet all the other eligibility criteria;
• the value of your mortgage (and any loans taken out against your home) is less than 120 per cent of the value of your home.

How the Mortgage Rescue scheme works

You can be referred to the scheme by:

• advice agencies, like the Citizens Advice Bureau or Shelter;
• your mortgage lender;
• the courts.

You can also contact your local council directly to get advice about the Mortgage Rescue scheme.

When you apply for help from the scheme:

1. the council will arrange for you to meet with their money advisers;
2. you'll get advice and a plan to help you manage your debt or some other way that you can meet your housing costs;
3. the council may arrange an assessment of your home;
4. you may get financial help, either with a 'shared equity loan' or through a 'Government mortgage to rent', depending on your circumstances.

Shared equity loan

The council may involve a Registered Social Landlord (RSL) - an independent housing organisation registered with the Tenant Services Authority. The RSL can provide a shared equity loan, which means they will pay off a proportion of your mortgage. In return they receive a share in your property's 'equity' - the market value of your home minus the outstanding mortgage balance. The RSL will agree on the proportion, which will be based on an assessment of your household's finances. This will reduce your mortgage to a more affordable level so you can continue to make repayments.

Government mortgage to rent

Alternatively, the RSL may suggest a Government mortgage to rent, which means the RSL will pay off your mortgage completely by buying the property. You'll stay in your home and pay rent to the RSL as their tenant. The rent will be at a level lower than the 'market rate' - this will be cheaper than if you were renting from a private landlord.

You'll continue to receive advice after you have entered the scheme to help you manage your finances.

Further information

For further information about the Mortgage Rescue Scheme:

• telephone: (01375) 652007 or (01375) 652820
• email: housing@thurrock.gov.uk

Useful web sites

• Gov.uk - Mortgage Rescue scheme
• Gov.uk - Mortgage Interest Run On
• Gov.uk - Support for Mortgage Interest (SMI)
• Gov.uk - Options for paying off your debts
• Citizens Advice Bureau - the charity for your community
• Shelter - the housing and homelessness charity

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