Loan Assistance for Homeowners Information Booklet

Transcription

1 Repairing and Improving your Home Loan Assistance for Homeowners Information Booklet Plymouth City Council Private Sector Housing Team Strategic Housing Directorate of Development and Regeneration

2 What is this booklet about? This booklet is about the types of help the Council can give to householders in repairing, improving and maintaining their properties. You are strongly advised to take independent financial advice before making any financial commitment. Before you consider one of our loans to improve your home, you may want to enquire about available grants: For central heating and insulation grants contact Energy Action Devon ( ). If you are elderly or disabled and your house needs to be adapted to help you cope better you may be entitled to a Disabled Facilities Grant from the Council ( ) Some charities also offer financial assistance, contact your local Citizens Advice Bureau for further details ( ). Sometimes friends and family can also help with essential repairs, or it may be possible to extend or increase an existing loan or mortgage. Loans The help offered by the Council includes a number of loans for householders to make necessary improvements to their properties. Houseproud Loans We can refer you for a Houseproud loan for home improvement. These loans are administered by our partner the Home Improvement Trust and financed by the Dudley Building Society. These loans are tailored specifically to address the needs of homeowners and long term leaseholders aged over 60 and those with disabled people living with them to repair, adapt and improve their home. 2

3 Home Improvement Loans If you are in receipt of qualifying means tested benefits (see page 8), you may be able to apply for a Home Improvement Loan administered and financed by Plymouth City Council. Emergency Repair and Maintenance Loans For urgent repairs to your home and to repair and maintain essential disability equipment, for recipients of qualifying means tested benefits. Warm Front Top Up Loans Warm Front is a Government grant scheme to help with the cost of central heating and insulation, this loan can help with any top up you may have to pay. You will need to be in receipt of the qualifying benefits. Loans are normally available for works that improve properties towards meeting the Decent Homes Standard. This is a government standard which refers to the health and safety hazards in your home, whether it is wind and weather tight and whether it has reasonable kitchen and bathroom facilities. If you are over 60 or disabled you will be referred to our home improvement agency, Care and Repair, who will assist you through the process and help with selecting builders. You may wish to contact them before completing any forms on Care and Repair is a Home Improvement Agency part funded by Plymouth City Council to assist older and disabled people through the loans process, there is no charge to you for this service. They are able to assist you with private works that you may wish to pay for yourself, there is a fee payable for this part of their service. 3

4 Houseproud Loans Contact the Home Improvement Trust direct on or Care and Repair on The Council works in partnership with the Home Improvement Trust (HIT) a not for profit organisation that arranges home improvement loans for homeowners and long term leaseholders aged 60 and over, and those who are registered disabled or living with registered disabled people. The HIT offers three types of loans: Capital and Interest Repayment Loan Lifetime Interest-Only Loan Lifetime No Service The minimum loan amount is 3000; the maximum is determined by your age and property value. Loans can run over the lifetime of the applicant and are secured as a mortgage on the property What about interest rates? The HIT works with the Dudley Building Society, whose standard variable rate applies - please contact the HIT on to check the current interest rates, they are variable and will change over the duration of the loan in line with main stream lenders. Who can apply for these loans? The Houseproud loan is available to all Plymouth residents who are either aged 60 or over and registered disabled or live with a registered disabled person in their home. What if I cannot afford any repayments? You may be eligible for help from the Department of Works and Pensions with interest repayment if you are in receipt of specific means tested benefits such as Income Support or (guaranteed) Pension Credit. The HIT will help you to apply for this. You will have to pay the difference between any amount assisted by the DWP and 4

5 the actual interest payable or, roll it up and add it to the loan. You may be able to roll up your loan, so any interest is added to the loan outstanding. Capital and interest will be paid off when you sell the property or transfer it to anyone else. What happens if I fall on hard times will I lose my home? The HIT guarantees that there will be no repossession and no negative equity for anyone who takes out a Houseproud Loan, subject to the applicant(s) being aged 60. This means if you are over 60 that you will never owe more than your house is worth and you will not be repossessed if you cannot afford to make repayments. The loan may be rescheduled and this will mean that you change your loan to an interest only or a capital and interest rollup loan which is paid when your house is sold or title is transferred to someone else. What about fees? The Houseproud loan is secured on your property with a first legal charge. Arranging the loan and carrying out any necessary Local Authority searches currently costs 580, if your property is already registered with the land registry. If your property is not registered it will cost more. The lender also offers to insure your property, if you turn down their insurance there is an additional one off fee of 30. Fees can be added to the loan amount. If you pay off the loan in the first year there is a redemption penalty of 2% of the loan amount. All fees can be added to the loan or you can pay them in advance. 5

6 Council Loans It is not possible to retrospectively apply for assistance towards works that have previously been commenced or completed. Home Improvement Loan If you do not want to take out a Houseproud loan or do not meet the criteria for a Houseproud loan we may be able to offer you an alternative loan option, the Home Improvement Loan. The Home Improvement Loan is financed by the Council and numbers of available loans are strictly limited by the amount of funding the Council receives from the Government annually. What about fees? Arranging the loan and carrying out any necessary Local Authority searches costs 580, if your property is already registered with the land registry. If your property is not registered it will cost more. These fees can be added to the loan. The Home Improvement Loan is secured on your property with a legal charge. This means that the Council can claim back the monies owed when you sell the home or when the title to the home is transferred to anyone else. Emergency Repairs and Maintenance Loan If you don t need a Home Improvement Loan but have some urgent repairs or need to do some maintenance to essential disability equipment, you can apply for an Emergency Repairs and Maintenance Loan. The maximum loan amount is 3000 and you cannot have more than one Emergency Repairs and Maintenance Loan in any 5 year period. What about fees? There are no arrangement fees for an Emergency Repairs and Maintenance Loan. However, there may be a small fee for checking 6

7 ownership of the property, this will be added to the loan. The Emergency Repairs and Maintenance Loan is secured on your property with a local land charge. This means that the Council can claim back the monies owed when you sell the home or when the title to the home is transferred to anyone else. Warm Front Top Up Loan We can offer you a top up loan to help you find your contribution towards a Warm Front grant for heating or insulation. The maximum loan amount is 1000 and you cannot have more than one Warm Front Grant top up. You will need to have a valid Grant approval. What about fees? There are no arrangement fees for a Warm Front Top Up Loan. However, there may be a small fee for checking ownership of the property, this can be added to the loan. The Warm Front Top Up Loan is secured on your property with a local land charge. This means that the Council can claim back the monies owed when you sell the home or when the title to the home is transferred to anyone else. 7

8 The following paragraphs apply to all Council loans: What about interest rates? The Council funded loans charge interest at Bank of England Base Rate (up to a maximum of 3%) per annum which is added to the loan amount at the end of each full year. The interest rate is fixed at the time of approval and remains constant until the loan is due for repayment. The loan and interest are paid when the house is sold or title otherwise transferred or you move to another home. The interest is compound interest which means that we calculate your interest charges based on the total amount you owe at the end of the year. The previous years interest is added to your loan every year, which increases the total amount you owe. Who can apply for these loans? Homeowners/occupiers who live in Plymouth and where all owners of the property are in receipt of at least one of the principal means tested or disability related benefits: Income Support, Council Tax Benefit, Income Based Job Seekers Allowance, War Disablement Pension, Pension Credit, Child tax credit providing the recipient has a relevant household income of less than 15,460*. *Subject to change by Government Working Tax Credit (WTC) providing the recipient has a relevant household income of less than 15,460* plus either a disability element of WTC, Disability Living Allowance or, Attendance Allowance, 8

9 What if I cannot afford any repayments? All Council loans are no service loans, which means that there are no monthly repayments, the loan and interest is rolled up and paid when your property is sold or otherwise transferred or you move to another home. You can however pay off the total amount outstanding at any stage. What if I fall on hard times will I lose my home? The Council gives a guarantee that there will be no repossession or negative equity for anyone who takes out a loan. Because there are no monthly repayments of the loan you cannot go into arrears. Also because the loan is only repayable when you move, sell or pass on your home, you should be able to pay back any outstanding amount from the proceeds of the sale. The loan will be capped not to increase to an amount which is more than the value of your property. This way you will never owe us more than your house is worth. However if you have any other loan or mortgage secured on your home (in addition to the Home Improvement Loan), your other lender may still have the option of repossession for their loan if you fall into arrears on their repayment. In addition the Council cannot guarantee that your loan with the other lender(s) will not give rise to negative equity. 9

10 How do I apply for help? If you wish to apply for a Council loan (these are Home Improvement Loan, Emergency Repair and Maintenance Loan or Warm Front Top Up Loan), please request an enquiry form from the Private Sector Housing Team on or contact Care and Repair on Please note that completing an enquiry form does not commit you to taking out a loan and does not guarantee you will be offered a loan. 1. When we receive an enquiry for a Council loan we will advise you if there is likely to be funding available within the current financial year. If no funding is available, we will suggest that you apply for a Houseproud Loan (if you are eligible) or add you to the waiting list until funds become available. 2. When funds are available, we will arrange a visit to assess your home. 3. We will advise you of the works that need to be done to make the home Decent this is the Government s definition of housing that meets the basic minimum standard. 4. We will then discuss the works that you would like done; where these help to meet the Decent Homes Standard they will generally be eligible for loan assistance. 5. The Council will prepare a schedule setting out the works we both agree should be carried out which we will then send to you or Care and Repair if you are over 60 or disabled together with an application and forms that need to be completed as part of your application and a full copy of the conditions of the loan. 6. You will need to arrange for builders to quote for these works and then submit these quotes to the Council. Our Home Improvement Agency Care and Repair may be able to assist you with your application and obtaining quotes for the works from their registered list of contractors. 7. You will need to ensure that you have the appropriate consents to carry out the works. Your mortgagee (if you have an outstanding loan) will need to agree to the works being carried 10

11 out and a further legal charge (if applicable) being placed on the property. Your freeholder (should there be one) will also need to agree. The works may require Building Regulation/Planning approval or other approvals. Your builder will be able to advise you how these are to be obtained. Care and Repair will be able to do this on behalf of people over 60 or disabled. 8. When the loan application is complete the Council will formally consider your application. If your application is approved, we will advise you of the amount of loan that has been approved, the conditions of loan and details of ultimate repayment. This is the loan offer. 9. You decide whether to accept the loan offer. If you do so, you will be committed to the loan by signing and returning the forms. 10. Once you have accepted the offer you may instruct you builder to start work. 11. The loan will be paid to the builder on satisfactory completion of the works. 12. The loan becomes repayable in accordance with its conditions, although you may decide to repay earlier if you so wish. Below is an example of how much interest may be added to a loan based on the maximum interest rate of 3% Initial Amount Owed Years 1,000 2,000 4,000 5,000 10, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

12 Private Sector Housing Team Strategic Housing Directorate of Development and Regeneration Plymouth City Council Civic Centre Plymouth PL1 2AA Tel Fax Published: January 2010 Ref: Repair and Improving Loan Booklet