Can You Get A Mortgage On Benefits Or With Bad Credit?

August 18, 2022
7:09 am

Can You Get A Mortgage On Benefits Or With Bad Credit?

This guide will explain how you can apply for a mortgage on benefits. Whether your benefits are paid as a top-up to your salary, or you solely rely on benefits.

Our mortgage advisors at Expert Mortgages discuss the options available to you to apply for a mortgage with benefits. Whether you are paid benefits as a top up on your salary or solely rely on benefits, we look at what’s available.

Can I get a mortgage on benefits?

You will be pleased to know the answer is yes, however whilst it’s possible, it won’t be easy and you will experience a more complex process than most. Different types of benefits and if you are employed receiving benefits will have an impact your mortgage application.

Are you employed and claiming benefits

Your options are greater if you are working in addition to claiming benefits and can make your mortgage approval easier, as you’ll have more options to choose from. As a standard, when applying for a mortgage you will have to have a good credit score and show you have control of your income vs your outgoings. The advantage in this scenario is that the benefits you are receiving may boost your borrowing ability. This is because lenders will use your benefits in addition to your salary and calculate your overall combined income. Therefore you may be able to borrow more than you expected.

Are you unemployed and claiming benefits looking for a mortgage?

Whilst you can get a mortgage if you’re unemployed and claiming benefits, your options will be reduced and in certain circumstances you will be even more limited. Even though you may be able to afford repayments, lenders may not be willing to offer a mortgage to those unemployed on benefits, but there are options out there for you to explore.

Can I get a mortgage whilst disability benefits?

The short answer, yes. You will be able to find mortgages for those receiving disability benefits, but there will be limited options available to choose from, as it will be difficult to pass a lender’s affordability check. If you suffer from a long-term disability and can show your disability benefit is likely to continue you will have more options available as you will be able to show that the benefits are likely to continue. If you are suffering from a short-term illness or disability where you are likely to recover from, gaining a mortgage could prove to be a challenge because your income may stop at any time. Lenders will need to understand if you will be returning to work or how long your benefits are likely to be in place.

I have a long-term disability, am I hold scheme

If you suffer from a long-term disability, you may be eligible for the government-backed HOLD scheme. The scheme is similar to the shared ownership scheme, allowing you to part-rent and part-buy your home, where you can own between 10-75% of your home and pay rent on the remainder.

How do I get a mortgage in principle?

Call our team at Expert Mortgages or complete a mortgage search unlocking our access to thousands of mortgage deals so can find the best potential mortgage deal for you. By working with us on a mortgage in principal means we can have the right deal in place for you, therefore meaning as soon as your offer is accepted you can just call us up and ask us to proceed with the full application, eliminating having to go through the same process again with other vendors.

How much does a mortgage in principle cost?

Expert Mortgages, Mortgage in principal is free of charge, however other might charge for this service, where as we only charge on your mortgage deal secured.

What do you need to get a mortgage in principle?

You will be required to provide the following information for both a Mortgage in Principal as well as your full application;

Income (Payslips, Bank Statements, or accounts if self-employed)
Spending (Credit card bills, utility bills, subscriptions, credit agreements
Previous addresses past 3 years

Ensure all of the information that you provide is correct otherwise your actual mortgage may be rejected.

How long does a mortgage in principle last?

A mortgage in principle is generally withstanding for up to 90 days, depending on the lender, but don’t panic, renewing your offer should be straightforward unless your circumstances or the economic climate has significantly changed.

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Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1%, but a typical fee is 0.3% of the amount borrowed.

Expert Mortgages is a trading name of Expert Mortgages Herts & Cambs Ltd which is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority.

Expert Mortgages Herts & Cambs Ltd. Registered Office Address: Hardcastle Burton, Market Hill, Royston, United Kingdom, SG8 9JN. Registered in England Number: 13095386.