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Smi + Charge On The Property

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Googling some SMI stuff I came across this Parliamentary document:

http://www.parliament.uk/briefingpapers/commons/lib/research/briefings/SNSP-05818.pdf

The Council of Mortgage Lenders also claims there would be "a moral hazard in giving

borrowers a signal that they do not have to comply with the contractual terms of their

mortgage and will be compensated by the state for failing to do so, and that borrowers

who do not qualify for state support and who struggle to meet their commitments would

be cross-subsidising those who do not".

It says the best solution is to pay SMI at the rate applying to individual borrowers'

mortgages, ensuring no over- or underpayments.

However, it added: "If the government is worried about the additional cost of this, it

could consider a plan we have suggested before, namely making SMI payments a

second charge on the property. This would enable the costs to be recovered when the

borrower remortgages or sells the property. That could help justify making more

borrowers eligible for SMI, and would be a fair way of balancing the interests of

homeowners and taxpayers."

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However, it added: "If the government is worried about the additional cost of this, it

could consider a plan we have suggested before, namely making SMI payments a

second charge on the property. This would enable the costs to be recovered when the

borrower remortgages or sells the property. That could help justify making more

borrowers eligible for SMI, and would be a fair way of balancing the interests of

homeowners and taxpayers."

They'll have to wait a long long time in many instances I suspect.

I can't imagine too many SMI recipients having a great deal of equity as a starting point.

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Googling some SMI stuff I came across this Parliamentary document:

http://www.parliamen.../SNSP-05818.pdf

So any SMI received becomes a second charge on the property which means that it has to be repaid when the house is sold? Wonder what percentage of people in receipt of SMI will eventually go bankrupt? Still, will mean at least the taxpayer will receive some money back. however, there are a lot of mortgages where they do not allow a second charge to be taken out.

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I can't imagine too many SMI recipients having a great deal of equity as a starting point.

I dunno, over 50% of SMI claimants are over 60.. you'd imagine no lender would have given a mortgage to someone of that age without some equity.

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So any SMI received becomes a second charge on the property which means that it has to be repaid when the house is sold? Wonder what percentage of people in receipt of SMI will eventually go bankrupt? Still, will mean at least the taxpayer will receive some money back. however, there are a lot of mortgages where they do not allow a second charge to be taken out.

It means you will need higher deposits for a mortgage.

and if you were in receipt of SMI for any time in the mortgage, then your equity is reduced...

this is good for HPC, but not in the short term.

its another kick the can measure by useless bankers.

No doubt, SMI has helped 1m back to work...triple the SMI and we would have 100% employment.

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I dunno, over 50% of SMI claimants are over 60.. you'd imagine no lender would have given a mortgage to someone of that age without some equity.

I knew a lady, in her early 60snow, with two mortgages, both IO, both running to her mid 70s...one was a BTL. She was a PART TIME single care worker.

The BTL was to pay for both mortgages.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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