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Housing Benefit
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I am currently a full time student and have two more years of my course left. I get housing benefit to help with my mortgage payments because I had the mortgage since 1989. My income is so dramatically reduced since becomeing a student and I wanted to sell the house so that I can stop worrying about debts and concentrate on my studies. I have been told that if I sell the house that I will not get any further help with housing benefit. Is this correct ? Supposing I wasn't a student but had become unemployed and could not pay my mortgage - what then? Do people get help with this sort of thing.
if I sell, I will be homeless and have to rent privately. It is unlikely that I will get another mortgage if I sell as I have only a part time job and a very poor credit rating since becoming a student and defaulting on my mortgage payments and going over my overdraft limit. I keep thinking I can tough it out for two more years but the bills are really piling up and I can't think of anything except the debt. Any ideas or practical suggestions would be appreciated.
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As far as I know ... if you are on benefits and privately renting, provided you do not have any savings above a certain figure (you would need to find out what that figure is) then they will pay your rent directly to your landlord. This does not mean you can rent a penthouse suite etc. they will allow a certain figure which they think is reasonable. You will need to pay the deposit and the first month's rent probably, and also there many be a lot of private landlords who do not want to have you if your rent is being paid by the state. However there are many that are fine with it because they know they are going to get their money. I am not sure how this works with students. The best thing to do would be to go along to your local Council Benefit office and ask them.
I think you are in a fantastic position in so much as you can get help with your mortgage costs from housing without having to wait the obligatory 9 months that are now the rules for new cases.
The Solution would be to seek to release some of the equity in your property. In order to retain your right to assistance for housing benefits to pay the interest of your mortgage, you may have to get a 'secured' loan - which would run alongside your mortgage instead of replacing it. (raise enough to pay off your debts and arrears etc.,)
If you were to 're-mortgage' to release equity the effect would be a) you would no longer be entitled to housing benefit as they would say the house has a new lender and therefore falls outside the old rules of claiming assistance, and they would make you wait 9 mths before you could claim again.
If you were to sell the house - the amount of monies you would make (i.e - property prices have increased considerably since you bought your home) and therefore you would have more money in 'savings' than the current benefit rules allow - I think it is �16K.
There are hundreds of lenders that will arrange a loan for you secured against your property - they would not be high st lenders - they would be what is called 'sub-prime lenders - they charge more interest, but certainly offer solutions for those who are not 'squeaky' clean.
As you only work part-time - they may suggest a 'self certification loan' - which means you sign and agree that you can afford to repay the loan - clearly you have to be sure that you can repay the loan as I don't think the housing would pick up the tab for additional borrowings. Seek independant financial advise from a mortgage broker, don't just ask one, ring around as they all deal with different lenders.
Lastly housing only know what you tell them.
Best of luck
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