A guide to Regional Mortgage Assistance Loan Scheme Breathing Space HOMEOWNERS: IN DANGER OF LOSING YOUR HOME? Breathing Space Scheme www.wakefield.gov.uk
Introduction If you are an owner occupier and you are in difficulty with your mortgage, there may be help available through the Breathing Space scheme. Breathing Space offers an interest free secured loan that provides help to pay your mortgage. The scheme is administered by Wakefield Council, on behalf of participating local authorities in Yorkshire and Humberside. Who is the loan for? If you are having difficulties with your mortgage because of a drop in income due to losing your job or ill health or some other change in your circumstances a Breathing Space loan would offer short term help. What is the loan for? The loan can pay your mortgage and/or your continuing mortgage instalments for up to 12 months, depending on your circumstances. It can also help with secured loan arrears and instalments. Before you apply Before applying you must get advice about your mortgage difficulties, as there may be other options available to you that are more suitable than taking a loan. Details of where to get free advice can be found at the end of this leaflet. Please do not delay - seek advice straightaway, even if your lender is not yet threatening repossession. How to apply to the Breathing Space scheme You may be referred to us by the agency you have contacted for help or you can also contact us directly: By post or in person: Breathing Space, Floor 2, Wakefield One, Burton Street, Wakefield WF1 2EB By telephone: 01924 305892 1 2
What help can we give you? We will tell you about the Breathing Space Loan Scheme and discuss whether it is suitable for you. You will then make your own choice about whether to go ahead. If we go ahead with a loan it will be tailored to meet your needs. We will pay for Independent Financial Advice so you understand the implications of taking out a loan with us. What happens next? We will carry out a detailed assessment of your application to the scheme, including the reasons for your difficulties. We will assess your household budget to understand your finances. We will carry out a credit reference search but a bad credit rating won t normally rule you out from being helped by us. We will pay for an independent valuation of your home. We will contact your lender to discuss your mortgage difficulties and to get their consent to our loan. All the costs associated with your loan will be met by us and you won t be charged even if the loan doesn t go ahead. How does the loan work? The Breathing Space Loan is an interest free secured loan. The amount we can offer you is between 2,000 and 15,000. The amount you are offered will be decided by the Council and will depend on what you need. Your total secured borrowing including this loan must not exceed 90%. The loan is secured as a legal charge on your home for a maximum fixed term of 3 years. The loan is applied in 2 ways: 1. If we feel it is better for you to sell your home and move, we can give you a loan that will clear arrears and perhaps give some monthly instalments whilst you do this. The loan will be repaid in full as part of the property sale. To qualify for this you have to put your house on the market at the independent valuer s recommended valuation before we complete the loan. We ask you to sell at the price recommended to us as this is an accurate market valuation to stimulate a speedy sale. You may have to pay some upfront fees to the Estate Agent. The loan is applied in 2 ways: 2. If we feel that your circumstances will improve in the next few months we might be able to give you a loan that will clear your arrears and perhaps give some monthly instalments. The loan must be repaid in full at the end of the fixed 3 year term Although you don t have to repay by instalments during the 3 year period we will encourage you to do this if your budget shows you can afford it. You can repay the loan in full at any time during the 3 year period, for example, if you sell your property or re-mortgage. we will discuss which of the 2 options we feel is best for you during the early stages of your loan application. You will also have the opportunity to discuss the loan and other possible alternatives with an Independent Financial Advisor before you commit yourself 3 4
Do I have to pay any fees? No fee. You will need to repay this loan as a lump sum at the end of the 3 year term. Think carefully about how you will be able to do this. If you do not repay the loan in full by the end of the loan period the Council may take court action to recover the loan and/or take possession of the property. What do I have to do? You must agree to receive debt counselling to address any other problem debts. You must agree to 3 monthly reviews. You must continue to live in your property as your only residence throughout the loan period. All owners of the property must be party to the application for it to be considered. All occupiers aged over 17 will need to sign a consent form. You must maintain adequate building insurance for the property throughout the loan period and provide a copy if required. There are further conditions. These will be discussed with you at the application stage. More information about the loan The Breathing Space loan will be paid directly to your mortgage lender. Interest is not charged on the loan. However, if you do not repay your loan at the due date, interest will be charged at the Bank of England base rate plus 3%. What to do if you have a complaint If you wish to make a complaint in relation to the Breathing Space scheme, please contact: Wakefield Council The Complaints Team Town Hall Wakefield WF1 2HQ Telephone: (01924) 305757 If we cannot settle your complaint with us, you may be entitled to refer it to the Local Government Ombudsman. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP PAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. 5 6
Where to get advice The Breathing Space scheme will not be the best option for everyone. To find out about other options for tackling your mortgage difficulties, you should seek advice. You can get free advice from the following: The Housing Advice Team Queens House Queens Row Market Street Wakefield WF1 1DF Telephone (01924) 302085 27 King Street Wakefield WF1 2SR Horsefair House Horsefair Pontefract WF8 1NX Westfield Resource & Enterprise Centre Westfield Lane South Elmsall WF9 2PU National Debtline Telephone: 0808 808 4000 (freephone) Website: www.nationaldebtline.co.uk Step Change Telephone: 0800 138 1111 (freephone) Website: www.cccs.co.uk Shelter Helpline Telephone: 0808 800 4444 Website: www.shelterline.org.uk Payplan Telephone: 0808 716 239 (freephone) 130202 Designed and produced by Wakefield Council, Communications 09/13