Housing Options Guide 8

Section 8. Mortgage and rent arrears

Mortgage arrears

If you are finding it difficult to pay any loans that are secured against your home, you should tell your lender immediately.  They may be able to come to an agreement with you about your payments.  Our specialist Housing Options Team can give you free information and advice about mortgage arrears and help you find a realistic solution to your payment problems.  They can also provide advice about rent arrears if you rent your home from a private landlord.  You should contact them for help as soon as possible.  The earlier you get in touch, the more chance of a successful outcome.  

You can contact the housing options team at:

Housing Options Team
PO Box 6760
IV30 1BX

Phone: 0300 1234 566 - Monday-Friday 08.45 - 17.00
Email: housing.options@moray.gov.uk

Emergency Out of Hours: 03457 565656

Home Owners Support Fund

If you own your home and are in danger of having it repossessed, the Scottish Government may be able to help.  They operate two schemes which fall under the Home Owners Support Fund.  These schemes are called:

  • Mortgage to rent - this allows a social landlord to buy your home and you would continue to live there as a tenant.
  • Mortgage to shared equity - the Scottish Government buy a stake in your home (up to 30%) so you can reduce your loan payments.

Before you can be considered for either of these schemes, you must first have received independent advice about your financial situation.  You must also have failed to reach an agreement with your lender on how to manage your arrears.  The Fund can help home owners who have reached the end of their mortgage but can't afford to pay what's left.  This is called the End of Term Cases.  This is a current pilot which remains active and under review. 

There is more information about help for home owners with mortgage difficulties on the Scottish Government website, where you can also find out if you are eligible for the Home Owners Support Fund.  Applications must be submitted through an approved money advisor and not directly from the home owner.  

Support for Mortgage Interest (SMI) 

If you are a homeowner and you receive certain income related benefits, you might be able to get help towards interest payments on:

  • Your mortgage
  • Loans you have taken out for certain repairs and improvements to your home

This help is called 'Support for Mortgage Interest (SMI)' and it is paid as a loan direct to your lender.  When you sell, or transfer ownership of your home, you will need to repay the loan with interest unless you are moving it to another property. You can’t get help towards the amount you borrowed, only the interest on your mortgage.  You are also unable to get help for missed mortgage payments or arrears.  There is no guarantee that you will be eligible for SMI and it is important to note that the interest added to the loan payment can go up or down. 

There is more information about Support for Mortgage Interest (SMI) on the Government website, where you can also find out if you are eligible.

Rent arrears

We know that people's circumstances can sometimes change and they may find themselves in financial difficulties.  It can be a worrying time when you can't afford to pay your rent or your bills and we are here to help.  Our aim is to provide advice and assistance to those who need it, and help manage rent arrears in a sensitive but effective manner.  If you are a Moray Council tenant and are having trouble meeting your rent payments, you should contact us as soon as possible before your rent arrears become unmanageable.  Your housing officer will discuss your arrears with you and help you to find a solution.  Our priority is to make sure we offer you help and support to stop you getting into debt, and to keep your home secure. 

You can find more information about rent arrears and rent payments on our website at the following links:

Rent arrears

Help to pay your rent and council tax

Pay rent on time (Leaflet)

Universal Credit (Leaflet about how to claim for the first time to help pay your rent)

Section 11 duties

Section 11 of the Homelessness etc (Scotland) Act 2003 places a duty on landlords and creditors to tell the relevant local authority whenever they raise proceedings, or serve notices, to repossess a home.  This duty gives the local authority early notice of a household becoming at risk of homelessness due to rent or mortgage arrears.  Our housing options team will then attempt to contact the household with an offer of support and advice before their home is repossessed.

You can find out more about Section 11 duties on the Shelter Scotland website.

Money and debt advice

Our Money Advice team can help you get your debts under control.  They can help you deal with mortgage and rent arrears as well as other debts such as council tax arrears, loans, utility arrears and store cards.  Their advice is free and confidential.  The team will go through your finances with you and advise you of all the possible options so you can make an informed decision of how to tackle the debts.  They may be able to speak to your creditors on your behalf, or make sure you have all the relevant information to discuss the situation with your creditors yourself.

It is very important that you do not ignore any debts, especially mortgage and rent debts which can put your home at risk.  Talk to someone and reach out for some advice and guidance.  Make sure that you use a debt advice service that is free and independent such as our Money Advice Team, National Debtline or Step Change.

Contact our Money Advice team by calling 0300 1234 563 or emailing money.advice@moray.gov.uk

If you are struggling due to the current cost of living crisis, please visit our webpage which offers a lot of useful advice including possible benefits, grants, crisis loans, energy efficiency and other money advice: www.moray.gov.uk/costoflivingadvice

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