If you are struggling to pay your mortgage and you already receive benefits from the government, you could qualify for support towards your mortgage interest payments. However, there is a lot of confusion about what this actually means for homeowners. This series of two articles will analyze what the SMI, Support for Mortgage Interest, program can do for you, what it can’t do for you (sadly that includes most things), who can apply for SMI and how your SMI is calculated. This includes important changes that could affect the SMI benefits you now receive.

What is the SMI Program?

The Support for Mortgage Interest is a program designed to help vulnerable homeowners, who are at risk of losing their home, pay the interest component of their mortgages. Note that this program is only available for home loans and loans purchased to finance a home improvement.

It is also important you understand that SMI payments are not made directly to you. SMI payments are normally made directly to your lender. You will not receive the payment; it will be reduced from your monthly (or weekly) mortgage payments.

What It Does Not Include?

The SMI program does not help you pay the balance of your mortgage, only the interest. This means the government will help you pay the interest accrued on your loan, but not the loan itself. Every month a big chunk of your mortgage payment goes towards paying the interest on your loan, especially in the early years of a mortgage. The SMI helps towards the interest component of the mortgage not towards paying the actual loan.

You SMI will not pay your insurance policies or any mortgage arrears you owe. You will need to apply for a different program, such as shared ownership, or apply for a mortgage refinance to consolidate mortgage arrears into one affordable loan.

Who Can Apply?

To qualify for the Support Mortgage Interest program you must be already receiving income support from a government agency. This includes unemployed workers who are receiving income-based Jobseeker’s Allowance, people who qualify for employment and support allowance and those who receive pension credit.

Summary

The Support Mortgage Interest program provides financial aid to people already receiving some kind of government income support who are paying interest on a mortgage or home improvement loan.

If you qualify for SMI you will be interested in learning how your SMI payments are calculated, what happens if you receive excess payments and where you can go to get help in applying for SMI. Read more on this subject in our next article: Changes to Mortgage SMI: How Is It Calculated?

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.