MATRICS would like to thank both the Scottish
Government and the Accountant in Bankruptcy for
their continued support and funding
Introduction
Two schemes operated by the Scottish
Government help owners who are
experiencing difficulties in paying their loans
secured against their property:
• The Mortgage to Rent Scheme
• The Mortgage to Shared Equity Scheme
Objectives
• Review of entry requirements
• Application Process – How it works
• Application Process – Tips on
completing the application
• Application Process – Working with
the creditors
Statistics
• 2009/10 there were 303 successful mortgage
to rent applications.
• No mortgage to shared equity applications
were agreed
• From 1st April 2010 to 31st August 2010 there
were 113 successful mortgage to rent
applications
• Three mortgage to shared equity applications
were agreed.
Entry Requirements
• Client has failed to reach agreement with lender on how
to manage arrears or have had a trustee appointed to
their estate who is forcing sale of property
• Value of home must be no more than the maximum
levels
• Client must have been unable to make full payments on
secured loan/mortgage for at least 3 months and have
accumulated arrears of at least one month
• The client ineligible for other UK government support
schemes or their property is still under threat of
repossession (e.g. support for mortgage interest)
Entry requirements
• Client must not normally own a home elsewhere
• Client must have lived in their home for the last
12 months
• They must not hold capital in excess of £2k if
they are under 60 and £4k if they are over 60
Additionally for mortgage to shared equity:
• Hold 25% or more equity in your home
• Not have trustee appointed
• Have a capital and interest mortgage
• Own a property which is above the Tolerable
Standard
Application Process
• Before an application can be considered
owners must receive independent advice
regarding their overall financial situation from
a CAB, Money Advice outlet or local authority
money advice centre. (www.scotland.gov.uk)
• Applications must be completed in full and
contain all supporting documentation
Application Process
On receipt of application Scottish Government will:
• Carry out initial assessment
• Do a search against the property
• Do a desk based valuation
• If the application is eligible they will instruct a
Scheme 2 valuation (which will also identify cost
of repairs)
• Obtain redemption statements from all lenders
with loans secured against the property
THIS PROCESS TAKES APPROX 5 WEEKS
Application Process
If the open market valuation meets the
eligibility criterion, the Scottish Government
calculates the level of equity the owner has
in the property and whether they will be
considered for the MTR or the MTSE
scheme.
Application Process
• Clients choice – Mortgage to Shared Equity
• Clients choice – Mortgage to Rent
Tips on completion
• Check that your client
meets the criteria for
the scheme they would
like to apply for
• Ensure all sections of
the application are
completed
• Documentary Evidence
(page 26, section 35)
• Advisers Letter
(www.wiseradviser.org)
• CHECK APPLICATION
Working with the creditors
• Advise secured lender early in process that
client applying for mortgage to rent/mortgage
to shared equity
• Shortfalls – MAT/BBA Common Financial
Statement
• Negotiation
• Lender Contacts – CML, FLA
(www.wiseradviser.org)
Further Help & Support
MATRICS
Money Advice Consultancy Service:
T: 0845 123 2326
E: consultancy@matrics.org.uk