New scheme to help homeowners
The government has just launched a new scheme intended to help homeowners with temporary financial problems by allowing them to defer part of their interest repayments by up to two years.
The Homeowners Mortgage Support (HMS) scheme will be available to borrowers who have a mortgage with any one of the lenders that are participating in it, including RBS, Bradford and Bingley, Northern Rock and all subsidiaries of the Lloyds Bank Group.
Eligible homeowners will be able to get help if they experience a temporary and unexpected drop in income and are unable to meet their existing monthly repayments, but only qualify if there is a clear likelihood that they'll be able to get out of difficulty reasonably quickly.
The scheme is designed to throw an indispensable lifeline to borrowers who may have had their working hours cut or are no longer able to work overtime or where one partner has lost their income.
Heywoods Estate Agents said it welcomed the scheme and that, although house prices had continued to recover, the issue of financial security remained a concern amongst homeowners apprehensive about the fragile economy.
A Heywoods spokesman said that repossession had always been a last resort for mortgage lenders. Nevertheless, this latest government initiative would provide additional assurance to homeowners and likely give an added boost to confidence in the housing market.