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Birmingham City Council

Birmingham City Council's Debt Advice Team

HOMEOWNER MORTGAGE SUPPORT

Homeowners Mortgage Support (HMS) could help if your household has had a temporary, unexpected drop in income and it is harder to meet your mortgage repayments. You could be eligible to delay some of your interest repayments for up to two years.

HMS will help people who are having difficulties meeting their mortgage repayments, but are likely to get their finances back on track in the near future.

For example:
• you may be relying on one income instead of two
• you can no longer work overtime
• you have had your hours cut
• you had two part-time jobs, but have lost one

If you are accepted for HMS, your lender will delay some of the monthly interest due on your mortgage. This will reduce your payments for up to two years. The money is not written off – you will have to pay it back eventually, with interest.

To be eligible for HMS, you must have been unable to meet your monthly mortgage payments. You will need to switch to an interest-only mortgage, if you have not already. Your lender will also ask you to commit to paying as much as you can afford each month. Your lender may have other conditions that you will need to meet. For example, they may say you should only have a small amount of savings. Talk to your lender about whether you qualify for HMS. Not all mortgage lenders are providers of HMS. You will not qualify for HMS if:

• your lender is not offering HMS or equivalent support
• you own more than one home
• your income is unlikely to return to its previous level, perhaps because you have a long-term illness
• you have insurance that protects your mortgage payments
• your lender thinks you will not be able to keep up with your monthly payments, even if they are reduced
• you are claiming Jobseeker's Allowance (Income based), Employment Support Allowance (Income based) or Pension Credit Guarantee - in this case you can claim Support for Mortgage Interest (SMI) instead from the Department of Work and Pensions. See our leaflet for more information about this.

If you are not eligible for HMS, talk to your lender about other options that may be available. Even if you are eligible, your lender may decide HMS is not the best option for you.

When you apply for HMS, your lender will usually refer you to an independent money adviser. If your lender does not refer you, it is still a good idea to go and see an adviser. They will make sure you understand how HMS will affect you and explain the risks along with the benefits. For example, you will be adding to your debt and you will end up paying more on your mortgage overall.

If you want to go ahead and your lender accepts you for HMS:

• you will renegotiate your monthly payments with your lender and agree how much you can afford to pay
• you will have to pay at least 30% of the interest due on your mortgage each month
• you can take advantage of the reduced repayments for up to two years
• you must tell your lender if your financial situation changes at any time
• you will have what you put off paying added to your mortgage balance
• you will have to pay back this money, with interest, when you return to making normal repayments


After a year, you will have a review with your lender and an independent adviser. They will look at whether you are still eligible for HMS and if it is still the best option for you.

When you return to making normal repayments, you will need to agree with your lender how to repay what you owe. This may mean increasing your monthly payments or the length of your mortgage.


The Homeowner Mortgage Support scheme is not the only way to get help if you are having problems with your mortgage.

Remember, your home is at risk if you do not pay the mortgage or other loans secured on your property

The information provided in this factsheet is for guidance only. Before taking any action it is important to seek advice. You can contact the Debt Advice Team on 0121 303 2087


Further Information

More information about support for home owners can be found at

www.communities.gov.uk/housing/

www.direct.gov.uk/en/HomeAndCommunity/


You can download this information in our Factsheet format here: