What should I do if I am behind with my mortgage?

If you are behind with your mortgage, or think you might be soon, it is important to explore what help you can get. There are two main sources. 

• The Home Owners’ Support Fund. 
• Loan for Mortgage Interest (LMI) – if you are getting certain benefits. 

What is the Home Owners’ Support Fund?

The Home Owners’ Support Fund gives two types of help if you own your own home and are in danger of having it repossessed.  

• The Mortgage to Rent scheme allows you to stay in your home, but as a tenant rather than a homeowner. A local council or housing association buys your home. Any mortgage, mortgage arrears, or secured loans are paid off. You become a Scottish secure tenant and pay rent at the rate the landlord usually charges in your area.   
• The Mortgage to Shared Equity scheme also allows you to stay in your home. The Scottish Government takes a share in your home, but you are still the owner. This means that your mortgage or secured loan payments are smaller each month. 

What is a Loan for Mortgage Interest (LMI)?

If you are claiming certain benefits, you may be able to apply for LMI to help with the mortgage payment. LMI is provided by the Department for Work and Pensions (DWP). 

The benefits that mean you qualify for LMI are: 

• Income Support 
• Pension Credit 
• Income-related Employment and Support Allowance  
• Income-based Jobseeker’s Allowance. 

The government has set a maximum amount of mortgage that LMI will help towards. This is: 

• £200,000 if you are of working age.  
• £100,000 if you receive Pension Credit. 

Are there any other schemes that could help?

There are other schemes run by mortgage lenders and private companies for profit.  

• Sale and rent back schemes.   
  Companies providing sale and rent back schemes must be authorised by the Financial Conduct Authority. Sale and rent back agreements must include a fixed-term tenancy agreement of at least five years. They must also have a cooling-off period of 14 days to give you time to think through your decision. 
   
• Quick sale companies specialise in buying homes from owners in financial difficulty, or who need a quick sale. The price the company pays for your home is less than its market value. Before agreeing to anything with a company offering you a quick sale, contact us for advice.