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In total last week saw a massive 25,000 people placed on the unemployment list as companies around the UK continue to cut down on their operating costs. Unemployment is fast approaching the 2...
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Tuesday 2nd September 2008
Lenders have been handed the baton by the government with changes to the Income Support for Mortgage Interest (ISMI). Currently anyone who loses their job will only receive assistance on their mortgage interest after 39 weeks of non-employment and only on the first £100,000 of their mortgage. Today’s changes will see assistance kick in at 13 weeks and cover the first £175,000 of any mortgage. So will it work?
While the feedback from the mortgage industry to date has been fairly positive there are concerns that with pressure growing on their own balance sheets they may not give lenders the breathing space which they require. If this is the case then the fall from 39 weeks to 13 weeks will make no difference.
At the end of the day it is in the best interests of both the borrower and lender to ensure that some kind of agreement can be reached in the event of difficulties. Once the ISMI kicks in then this will also assist home owners who can then look to remortgage their debts as and when the economy picks up. This is seen by many as the government’s last throw of the dice and all parties need to be understanding to make it work. |
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