Shared Ownership Mortgage Rescue Schemes

Mortgage Rescue Scheme, getting you out of financial troubles

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A number of lenders offer products suitable for mortgage rescue schemes, these allow you to remain living in your existing home, as a part-tenant/part-owner, this is applicable especially if you are unable to meet the payments for your mortgage and things appear to be out of control.

Answers to the following found below

  • What are mortgage rescue schemes?
  • Who is eligible for mortgage rescue scheme?
  • What is a mortgage rescue scheme?

Generally Mortgage Rescue Schemes were run by local councils, housing associations and lenders in partnership - sadly these schemes are now hard to find support from, being partly discontinued in various regions of the UK. There are alternatives now but the arrangements for these needs to be analysed for your specific circumstances. With a mortgage rescue scheme, your local council or housing association will buy part of your home and you will become a part-tenant/part-owner. This is known as shared ownership mortgage rescue. Under most scheme arrangements, you have the right to buy your home back in the future in full or part shares. Your lender or a new lender may offer you a mortgage rescue scheme if:

  • you've had a significant reduction in income (for example because you have gone from working full-time to part-time) but will still be able to make regular payments;
  • your financial problems will only be temporary;
  • your mortgage arrears have not got too high; and
  • you have a particular reason for wanting to stay in your home (for example, because your children are at school nearby or you work or have family in the area); and
  • there is a shortage of suitable council housing in your area.

Typically, a local authority or housing association buys the house from the borrower, paying off the mortgage and obtaining a discharge of the lender's standard security over it. The borrower then becomes their tenant, paying rent who takes out a smaller and affordable mortgage, usually with a new lender, which maintains an equity stance in the property.

We always recommend you read the full terms & conditions and small print on such arrangements and seek qualified legal or conveyancing advice, we are also always happy to assist in providing outline information to you. FREEPHONE us on 0800 092 0800 7 days a week.

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