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to think that that state should pay people's mortgage payments if their circumstances change and they lose their income?(111 Posts)
Am I right in thinking that this doesn't happen at the moment and that housing benefit only covers rent?
Of course there's still an incentive to find another job!
Unlike renters, mortgage owners still have to find the money to do essential house repairs and maintenance, and pay the costs when their plumbing or electrics or boiler breaks down.
They would only have to be given the same amount as renters will get in HB, so the government wouldn't end up paying for their spare rooms, they would be paying for the number of people living in that house to have a roof over their heads. The same as renters on a low enough income get.
WE HAVE NO MONEY!!!!
Not nearly as many repossessions as there 'should' be for the level of debt ability to repay etc etc.
have you tried 'telling' the bank what you can pay, I have several 'clients' who have done that recently and it has been accepted by the bank.
I would assume the bank is expecting to keep the house though!
BTL is tax deductible
We do have money. The Olympics cost £11bn. There is money for Trident. There is even money for the odious Eric Pickles' weird bin fetishes.
I can see both sides. The state shouldn't have to pay for me to own my house, BUT again, my mortgage is cheaper than rent. Also, if I was to rent, it would most likely be (initially) private. With so many private rents being on buy to let mortgages, the HB would be used to pay a mortgage, albeit not mine.....which would really get my goat......
The Olympics was paid for with borrowed money, trident is paid for with borrowed money, all of it is paid for with borrowed money.
Saying we have money is like me getting a mortgage for a luxury castle on my TAs wage and then saying I'm rich.
We really don't have money! But if we are going to give money we don't have to some individuals that need it, we should give to all individuals that need it.
I'll give you an example. My repayment mortgage for my three/four bed house is a full £240 less than the rent on a two bed flat in my estate. Because I have so much equity.
So where's the logic, if I was to lose my job, in forcing me out of my home into a smaller one and having the state pay more?
Yanbu, it should be paid but as a loan which is repaid.
Mind you I also think housing benefit should be repaid or a percentage at least.
The help available to mortgage payers is being eroded.
IIRC, currently you can get help with the mortgage (interest only) after a waiting period. It was called SMI.
Before this government, the rules were:
- a waiting period of 13 weeks before you could claim (this was brought down in 2009, to help people, as the recession brought the inevitable repossessions.
- a 2 year limit on payments, with exemptions for pensioners, households with children and the long-term sick, who could get it indefinitely
- The capital limit (the size of the mortgage that can have payments claimed against it) set at £200,000
The government is planning on the following changes:
- Upping the waiting period to 9 months before people can get any help with the mortgage (by which time many will have been repossessed).
- Reducing the capital limit: halved from £200,000 to £100,000.
- Extending the two year limit to include those with children or those who have been moved from disability benefits to job seekers allowance.
- The government is considering making payments recoverable, should the householder die or sell the property.
"The new death tax will see these payments recovered when the claimants dies. The consultation document even reveals that the Government is considering making all repayments recoverable on death."
A government document on SMI reform says "This is based on the principle that it is reasonable to expect owner occupiers to make some provision, whether by insurance or savings, to fund their housing costs for a period in the event of a change in their circumstances such as unemployment or sickness.
This isn't about getting us out of a financial hole, btw; this is ideological, it's about eroding the welfare state.
Bearing in mind we're in the deepest recession for decades this will lead to homelessness for many, and is certainly not aimed at helping the public during difficult times.
More info here
You used to.
In the 1980s this was changed.
I was in Lancashire at the time. People were literally moving next door from the house they were buying with a mortgage to a rented house because HB would pay the rent.
Then the landlord put the rent up, and HB still paid.
It was crazy at the time.
I think it should pay an amount whether rent or HB, but when you are back in work I think mortgage payments should be paid back. Or when you sell the house the amount of benefit should be paid back then.
Talkin The reason that mortgage interest is tax deductible here in the US is to put homeowners on an equal footing with landlords. At the state level, NJ at least allows those renting to deduct their rental costs if they earn less than $100K.
Talkin The limit on the amount of interest you can deduct is on a mortgage up to $1M. In addition, if you are paying AMT you can't deduct interest paid for a home equity loan if the proceeds were not used to improve your home.
That's what insurance is for.
Not the job of the state to protect your assets.
It would only work if it was loan or the state bought the house and became the landlord.
Insurance is a huge problem though for civil servants.
Our original terms were 3 years salary if we were made redundant (so who the hell bought insurance) they have now changed the terms and we're all redundancy risk and therefore can't get insurance.
I was nearly in a position where I could pay the mortgage, a short while back. It got me thinking about this situation...my mortgage monthly payments are approx £300 less than what I would pay to rent in our area. So if I failed to pay mortgage, got reposseseed and had to move into rental....is get housing benefit to cover £4000 more a year. Plus the government would still be paying someone's mortgage; just the landlords and not mine
You can't claim the interest payment help, if you are working
"That's what insurance is for.
Not the job of the state to protect your assets"
Luiji have you never heard of National Insurance?
The point of us all paying tax and National Insurance is that we will all get much better protection, and society will be better as a whole if everyone pays into a big pot and and is well protected if the worst happens.
If we go for a system where everyone must pay their own insurance privately, then many people will find they don't have the cover they they thought they did in a time of crisis.
Many will also take the risk of not having insurance (perhaps as they can't afford it) and will also find themselves in trouble. What happens to these people? If they end up homeless then either the state must look after them in emergency accommodation (which costs vastly more than someone's mortgage interest) pr not, which means families living on the streets. Do you want to live in a society like that?
Even those who do have cover will most likely find that the cover they got through the state insurance scheme was a better deal than they get through the insurance companies.
So, remind me, what is the point of moving this system of insurance in time of need to private insurance? Who does it benefit? Not individuals who need help, nor wider society. Oh, it benefits big business though (insurance companies). It makes no sense at all! It would be a massive backwards step for us all.
If you have a problem with the government protecting people's assets, then how about a program of building council housing? It'd be an investment for the tax payer, as well managed council properties make money for all of us. And then in times of crisis, the government will be protecting state assets rather than individuals'. Does that appeal? If not, why not? It makes financial sense after all.
The 'get insurance' argument makes no sense, for example my mortgage is less than the same rent would be for a similar property, if I lost my income I wouldnt get help but for example someone next door paying rent in a similar house would get HB of a greater value than my mortgage
If we've both up to the point of being out of work paid our tax/NI why should one be paid by the state indefinetly whilst the other gets no help whatsoever? If it got to the point where the government had paid off more of the mortgage then they would own it, not me, or the idea of it paid as a loan is fair - I don't expect them to pay off the capital so I can own it but they are more inclined to support those who rent
I do actually have insurance, but it annoys me that it's necessary
Insurance doesn't cover a lot of scenarios, that leave a person unable to pay a mortgage temporarily
RandomMess - I think the government should pay on a loan basis, they pay the mortgage (to a maximum amount etc) but you owe them that money back IYSWIM, effectively they buy a share in your house.
This is an excellent idea. It would be massively cheaper, would avoid the state basically paying for private landlords' assets, would reduce homelessness and would increase the social housing stock. Now you've said it, it seems bleeding obvious! Has it ever been suggested or debated in parliament, does anybody know?
Owning a property is not a neccessity, having a roof over your head is.
Buying a property is a choice, no one needs to own a property but everyone needs somewhere to live.
Anyone taking on a loan of 100K+ would be very silly not to take out adequate insurance to cover payments in the event of illness/unemployment.
The only people to blame for the Housing benefit fiasco is the goverment. They are the ones who sold off the affordable social housing in the first place leaving low income families no choice but to rent privately.
They are the ones who have failed to provide affordable housing for low income families therefore increasing the housing benefit bill and lining landlords pockets.
I was thinking about this last night and thought what if people in trouble found someone else who is in serious trouble, and swapped houses - ie renting off each other - and both claimed HB, which then covered their respective mortgage payments.
Is that an ok thing to do or morally wrong?
But if a person already has a home, why make them give that up and put a different tips over their head....and then pay the landlords mortgage for them?
I like the part ownership idea, especially if a mortgage is cheaper than rent. That seems like a winner for both sides.
I do see your point bigaudio however there a million different reasons why someone may find themselves unable to keep up with their mortgage repayments.
Illness and unemployment are insurable against at a cost of course.
But in many cases it's because people have spent outwith their means in the first place (or have been caught out in the property boom/crash). It wasn't that long ago everyone was encouraged to take out mortgages up to five times their annual salary and many people did, a slight increase in interest rates was often enough to create the scenario whereby they can no longer afford the repayments.
Many people who lose their jobs etc have crippling personal debts, should the goverment pay those too? A loan is a loan whatever the purpose of it and the person taking on the loan is responsible for repaying it, no one else.
And I see your point acceptable...it is a conundrum!
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