Equity Mortgages
Equity Mortgages
These have been introduced to encourage renovation of properties within the low income owner-occupied sector, and to enable those owners to achieve the Government's "Decent Homes Standard".
The Borough of Poole only offers its own Equity Mortgages, which are specifically for home improvements and repairs. It is funded through the Council's Private Sector Renewal Programme.
What Work is Covered By An Equity Mortgage?
The Government's Decent Homes Standard covers:
- Remedying identified health and safety hazards
- External and internal repairs to your property
- Improving heating systems, electrical systems, insulation and thermal comfort
- Replacement of old and defectve kitchen layouts
- Replacement of old and defective bathroom layouts
What Assistance Will We Provide?
The Equity Mortgages for home improvements are secured loans on the property by legal charge. The principal sums are repaid upon sale of the property or on the death of the owner(s).
For renovation works requiring secured mortgages up to £10,000 the loan will be interest free with no repayable term. The loan will be repaid when the proeprty is sold or in the event of the death of the applicant.
For renovation works requiring secured mortgages above £10,000 interest will be charged on the amount over £10,000. The interest will be at a fixed rate at the prevailing Bank of Engalnd base rate. Again the principal of the "whole" secured loan will be repaid upon sale or death of the owner(s), the interest is only charged on the amounts over £10,000 and is repayable on a monthly basis. For example if the loan is for £15,000, the interest will only be charged on £5,000.
There is no limit to the amount that you can borrow, and the Council will ensure that:
- the property reaches the Decent Homes Standard
- it is the best course of action and
- that you understand your commitment and are satisifed that you can affrod to repay your loan, based on your needs and circumstances and
- that you have received appropriate advice and have made your own informed choice
Will Your Home Be Safe?
YES - The Council will not repossess any property in order to recover a loan. All the principal will be repaid on the sale of the property or in the event of the death of the applicant(s). If the property is jointly owned the loan will remain with the property until the death of all the owners or upon sale of the property.
How Much Will I Pay?
Any loan up to £10,000 will incur NO interest and will not re repayable until the propertyis sold or the owner(s) die.
If a loan is over £10,000 you will incur a fixed rate interest on the amount over £10,000 - not on the whole amount of the loan. You will need to repay the interest on a monthly basis. Again the principal will be repayable on the sale of the property or in the event of the death of the owner(s).
What Fees Will You Pay?
There will be an arrangement and legal fee that will be included in the loan and this will be up to a maximum of £1,000. The level of the fee will depend on the legal work involved in determining ownership and finalising teh legal charge. The fee will be paid upon repayment of the principal and no interest will be added to these fees.
As no fees are paid up front the Council has no fee refund policy.
Does the Council Need to Survey My Property?
YES - We will arrange for a surveyor to call top draw up a schedule for the works that are needed to bring your property up to the Decent Homes Standard.
Am I Eligible to Apply For An Equity Mortgage?
If you are a Homeowner on a low income, you have equity in your property and you feel some repair/improvement works are needed, then YES. The loan will be subject to a test of financial resources to ensure that the limited funding is directed at those in the greatest need.
How Do I Apply?
Please contact Housing and Community Services to ask for a Provisional Application Form. When we have received the completed form we will check to see if you meet or criteria for assistance. If you do we will contact you to arrange for our survey to be carried out, whereby a formal appliaction can be made. Our Advocacy and Support Adviser will contact you to offer assistance with completing your formal application form, compiling any paperwork and contacting contractors for estimates. This is an optional service that you may wish to use.
Directgov