Birmingham Mortgage Rescue Scheme

The Mortgage Rescue Scheme in Birmingham is set up to help homeowners who are having trouble meeting their mortgage payments. The housing crisis is hitting many people who never anticipated having trouble with their home loan.

Birmingham offers a mortgage to rent scheme, and a shared equity loam (see resource 1). To qualify for these schemes the homeowner must meet certain criteria.

The owner must be pregnant, make under £60,000 per year, have minor children, be elderly, have only 1 home, or have a physical or mental impairment. Most of these requirements are to ensure that the homeowner is not taking advantage of the government scheme, and that there would be true hardship if the help is not available. You don’t have to meet all these requirements but must meet at least one.

The first step to determine whether or not you should investigate these schemes is to talk to a financial councilor. This councilor can help you to go through your budget and decide what scheme (if any) is right for you.
The mortgage to rent scheme turns a homeowner into a tenant of the homeowners association. Your homeowners association will, purchase your home from you, but rent it to you so you can continue to have a roof over your head. You will then pay rent which will be less than your mortgage payment was, and should be able to afford to stay in your home.

In the shared equity plan the homeowners association will purchase a percentage of the home. You will then be a co-owner with the homeowners association. This will help to reduce the regular mortgage payments that you are legally responsible for. The amount of ownership in the property that you will retain will be determined by how much you can afford to continue paying toward your mortgage.

It is always important to speak with your lender before considering any other options. Your lender does not want to be stuck with a house that they may not be able to sell. It is possible that they will be willing to work with you.

If your lender cannot help you, and the financial advisor has no suggestions other than the mortgage rescue scheme, than this option may be the only one left. If the homeowner wants to remain in their home, regardless of being the actual owner, the mortgage to rent option is a possibility.

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