Do I Qualify For SMI?

Some people wonder whether they qualify for SMI or not. One of the best ways to know this question is to examine exactly what SMI is and how it is used. SMI is reserved for homeowners who receive income related benefits. This will help them get qualified for mortgage interest payments. SMI is short for Support for Mortgage Interest.

To qualify for SMI, the person must be a homeowner and receive the following; pension credit income based jobseeker allowance, income support or employment and support allowance. The homeowner will be able to receive assistance for their mortgage interest payments. These payments are to be used only for improving the home. It will also allow the homeowner to buy their home if this is what they desire. While this program is available, there is really no guarantee that the applicant will get SMI for the loan they get.
Some of the things that are not included in Support for Morgage Interest programs is the overall amount borrowed by the homeowner. This means they are only able to get the interest that is due on the home. Insurance policies are also not covered along with mortgage arrears. Most financial advisors use a standard rate (interest) in order to get the calcuation for SMI. The standard rate is 6.08%. In some cases, the homeowner will have interest rates that happen to be lower than the calculated SMI payments. If this is the case, the homeowner will get more SMI than is required to pay off their lender for their mortgage. The homeowner does not receive the excess money, however the amount is credited to a mortage account under the homeowner’s name.

There have been recent changes made to SMI which can affect whether someone is able to qualify for it or not. Some of these changes were made in January 5 of 2009. Anyone who takes out a SMI after this date must follow the policies and procedures for these changes. Most the changes require the homeowner to wait at least 13 weeks from the date the original claim was made. The lenders refer to this as a ‘waiting period’. Before this change was made, homeowners had to wait a longer time (26-39 weeks) before receiving SMI. The amount that a homeowner can claim has increased from $100,000 to $200,000. For those who are receiving a job seeking allowance from the state, they can also get SMI for up to 2 years. Applicants who are getting income support, pension credits or employment allowance do not have a limit as to how much SMI they can receive.

If an applicant is claiming for SMI with a pension credit, they don’t have to abide by the waiting periods before getting mortgage interest payments. Extra money is provided to those who are about to change their status or work more hours (which results in earning more money). Before this status changes, homeowners can request a certain portion of their money upfront in order to still qualify for SMI.

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