Credit Crunch – Government Brings Forward Support for Home Owners
Following the Prime Minister’s announcement that more support would be given to home owners struggling with mortgage arrears, the Department for Work and Pensions has announced that the new package of support under the Income Support for Mortgage Interest (ISMI) system is being brought into immediate effect. It had previously been scheduled to start in April 2009.
The most important change is that the waiting period needed to qualify for ISMI has been reduced from 39 weeks to 13. In addition, ISMI will now pay the interest on mortgages up to £200,000 – the previous limit was £100,000.
The Council for Mortgage Lenders estimates that there could be as many as 75,000 homes repossessed in 2009.
“The Government’s move is one of a package of measures being introduced to help home owners cope with the effects of the credit crunch,” says Sue Williams head of our residential property department. “Home owners who find they are struggling to keep up with their mortgage repayments should take professional advice as soon as possible. It is often possible to negotiate with your lender to reschedule payments and demands for repossession can often be successfully opposed if legal advice is taken.”