I own my home but have fallen behind with my mortgage payments. I’ve heard about mortgage rescue schemes: what are they?

This information applies to Scotland.

The schemes that you talk about are generally run by a lender, local authority or registered social landlord.

This may look like a good way out of your mortgage problems because it allows you to pay off your debt while being able to stay in your home.

However, you need to be very careful about signing up to a mortgage rescue scheme because, in some cases, you could end up paying very high rent or even being evicted.

A mortgage rescue scheme may be the right option for you, as long as you check the terms and conditions of the scheme very carefully. You need to understand exactly what you are signing up to, and how this will affect your housing and financial situation in the long-term.

Things to look out for when you're thinking about signing up to a mortgage rescue scheme include:-

• whether the scheme offers benefit or debt advice and if so, is it independent or monitored in any way?
• who pays for the costs of selling the property?
• what type of tenancy is being offered? If it's a tenancy which only lasts a certain period of time to start with, can it be renewed after that and when can the landlord take court action to evict you?
• how are the rents set, including how often will the rent go up and by how much?
• what are the responsibilities and obligations of both the landlord and tenant?
• can shares in the property be bought back if your financial position improves?
• are there any insurance or bond arrangements if the scheme ever runs into financial difficulties?

You should also bear in mind that if you sell your home but continue to live there and pay rent, you may not be entitled to Housing Benefit.

For more information about Housing Benefit, see Help with your rent - Housing Benefit.

The Scottish Government runs a number of schemes to help homeowners who are having difficulties paying their mortgages. There is a mortgage to rent scheme and a mortgage to shared equity scheme. If you are accepted on to the mortgage to rent scheme your property will be sold to a social landlord and you can remain in the property as a tenant. If you are accepted on to the mortgage to shared equity scheme, the Scottish Government buys a stake in your property, so allowing you to reduce the size of your mortgage. There are detailed eligibility criteria for both schemes and you will have to get independent financial advice before applying for either scheme.

For more information about mortgage rescue schemes, including government-backed schemes, see Mortgage arrears.

If you're thinking about signing up to a mortgage rescue scheme, you should get advice from an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

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