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Govt overhauls Income Support for Mortgage Interest as part of rescue package

The Department of Work and Pensions is to revamp its highly criticised Income Support for Mortgage Interest scheme.

The DWP has announced that ISMI waiting period will be shortened from 39 weeks to 13 weeks for new working age claims from April 2009.

The capital limit for new working age claims will also be increased to £175,000 from £100,000 in April 2009.

The Association of Mortgage Intermediaries, the Council of Mortgage Lenders and the Citizens Advice Bureau have all recently urged an ISMI overhaul.

The Government says this £100 million investment will help prevent a further 10,000 repossessions across the UK.

The Government has also announced a £200 million rescue package for up to 6,000 of the most vulnerable homeowners facing repossession to remain in their home.

The rescue package also includes £400 million for social housing providers, including registered social landlords and councils, to create 5,500 more social houses by 2010.

Minister for Welfare Reform Stephen Timms says: “Our reforms to ISMI payments will simplify the system and make it easier for people who are eligible to claim.

“We will also increase the capital limit for new working age claims to take into account the value of people’s homes today. The improved financial help that ISMI provides will assist eligible homeowners with their mortgage interest payments should they get into difficulties.”

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