Mortgage Lenders that accept benefits – Citizens Advice

The purpose of this article is to provide a brief overview of the types and uses of mortgages available through financial institutions. This will include an explanation of how these loans are structured and some information about their advantages and disadvantages. It should be noted that there are many different kinds of mortgages out there, but they all have one thing in common – they allow you to borrow money from your bank or another lender at a lower interest rate than if you were borrowing directly from another person. In addition, most banks offer mortgage insurance which protects them against losses on any defaulted loan payments. The following sections explain what each type of mortgage entails and why it may be useful for you.

Mortgages can be used for various purposes, including buying property; refinancing existing debt, consolidating debts into one payment, paying off credit cards; funding business ventures, investing in stocks and shares, and saving up for holidays.


Mortgages with Benefits: Read Our Latest Reviews!

Damian Youell

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1: We contact you and take down your details, income outgoings, name, address etc.

2: We will research the whole market and email you a detailed quote as well as a list of documents to proceed.

3: You upload the documents and information needed via our channel our online portal.

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What is a mortgage on benefit income?

What does it mean when someone says, “I’m buying my house with a mortgage on benefits”? The term refers to any type of loan taken against future income, such as pension payments. In most cases, people use them for home improvements, holidays, weddings, cars etc. But what happens if you can no longer make repayments because you lose your job? Or maybe you want to buy something big like a new car or even renovate your whole house? Plus, lenders want to make sure borrowers don’t spend more than what they earn, so they won’t give them credit. However, you may need to pay back the amount borrowed with extra payments over time instead of just once when you buy the property. If you’re not able to afford repayments, then you could end up losing your house.

Can you get a mortgage on benefits?

The answer is yes, but it’s not always straightforward. If you’re on benefits, you might think that it’s impossible to get a mortgage. However, there are specialist lenders who will consider your application, and the good news is that you may be able to borrow more than you think.

At needingadvice.co.uk Ltd, we understand that getting a mortgage can be a daunting task, especially when you’re on benefits. That’s why we’ve put together this guide to help you understand your options and increase your chances of being approved.

First of all, it’s important to note that not all lenders will consider your application if you’re on benefits. However, some specialist lenders will be more willing to work with you if you can prove that you can afford the mortgage repayments. It’s important to remember that lenders will consider a range of factors when assessing your application, not just your benefits.

The first step in applying for a mortgage on benefits is to find a specialist lender who will consider your application. You can do this by using a mortgage broker who has experience working with people on benefits. They will be able to advise you on which lenders are likely to be more sympathetic to your situation and help you to prepare your application.

When applying for a mortgage on benefits, it’s important to be as honest and transparent as possible. You will need to provide evidence of your income, including any benefits you receive, as well as details of your outgoings. This will help the lender to assess whether you can afford the mortgage repayments.

Another important factor to consider when applying for a mortgage on benefits is your credit score. Lenders will take your credit score into account when assessing your application, and if your score is low, it may be more difficult to be approved. However, there are steps you can take to improve your credit score, such as paying off any outstanding debts and ensuring that you’re on the electoral roll.

It’s also worth noting that you may need to provide a larger deposit when applying for a mortgage on benefits. This is because lenders will typically require a larger deposit if they consider the application to be higher risk. However, if you can afford a larger deposit, this may increase your chances of being approved and reduce the amount of interest you need to pay.

Overall, getting a mortgage on benefits is possible, but it can be more difficult than for those who are in employment. By working with a specialist lender and being honest and transparent about your situation, you can increase your chances of being approved and get on the property ladder.

If you’re on benefits and looking to get a mortgage, we recommend that you speak to an expert broker who has experience working with people in your situation. They will be able to guide you through the process and help you to find a lender who will consider your application.

What benefits count towards my income for a mortgage application?

Government benefits that mortgage lenders will consider as part of income are while accessing the mortgage application are as follows.

Attendance Allowance

If you have been claiming an Attendance Allowance, then it counts as income. The amount of money you earn from attending college courses doesn’t matter either.

Carer’s Allowance

Carer’s Allowance is paid to help families care for someone else. It comes out of your weekly earnings and isn’t taxed. Mortgage lenders may use this information to decide how much you should borrow. Read more about this allowance in our article can I get a mortgage on carers allowance?

Child Benefit

Child benefit helps parents raise children. Some mortgage lenders will also consider this as part of your income.

Child Tax Credit

Child tax credits give extra cashback to working families. Your family receives more than £1,000 per year, depending on how old your kids are. Mortgage lenders will usually only consider this after other sources of income have been taken into consideration. You can read more in our other article on mortgages with child tax credits.

Disability Living Allowance (DLA)

If you have been claiming Disability Living Allowance, Income Support or Jobseeker’s Allowance, it counts as part of your income.

Incapacity Benefit (IB)

IB pays if you’re unable to work due to illness or injury. Mortgage lenders won’t normally consider this when deciding how much to lend, but some companies may ask about it before making an offer.

Jobseekers’ Allowance

This is a government scheme that gives people financial support whilst looking for employment. Mortgage lenders will usually not consider this in their decision-making process.

Maternity Allowance

Maternity allowance is given to mothers who need time off work because they’ve had a baby. Mortgage lenders will generally ignore this unless there has been a change in circumstances, such as having another child.

Pension Credit

Pension credit is available to older workers who aren’t receiving a state pension. You’ll get up to £255 every month. Mortgage lenders will often use this figure to calculate how much you can afford to pay each month.

Employment and Support Allowance ( ESA )

Disabled adults can use severe disablement allowance over 16 years old. They come out of your weekly earnings. Mortgage lenders will typically look at these payments first rather than any disability living allowance.

Widow’s Pension

A widow’s pension is payable to widowed women aged 60 or above. Mortgage lenders will generally use this figure to determine what you can afford to repay monthly.

Working tax credit-

The working tax credit is designed to encourage employers to hire those who would otherwise struggle to find jobs. Mortgage lenders will likely take account of this payment when calculating how much you can afford to pay each month, so make sure you keep all receipts.

There could be some other schemes that are not mentioned above, it’s always good to contact financial services before starting the mortgage application.

Which income sources qualify for a mortgage?

If you receive any benefit payments through Jobseeker’s Allowance, Income Support, Universal Credit, Housing Benefit, Council Tax Reduction Scheme, Pension Credits, or Child Benefits, these could count towards meeting your monthly housing costs. However, it is important to note that some benefits cannot be taken into consideration at all. For example, Carer’s Allowances cannot be considered because they are paid directly to carers rather than individuals.

Mortgage Lender options if you’re disabled or ill

The easiest way to find a lender who will take your benefits into account is to work with a mortgage adviser. Mortgage options if you’re disabled or ill Mortgage loans aren’t just available to those without disabilities or illnesses; they’re also accessible to anyone who needs extra support because of illness or disability. This includes carers, parents caring for children, veterans recovering from injuries sustained during service, and any others whose circumstances mean they need additional financial assistance.

If you’ve been diagnosed with cancer, you might want to look into specialised mortgage products. You could even apply for a personal loan instead of a standard mortgage.

Mortgage on disability benefits advice from the mortgage broker

Yes – they can! However, there are some restrictions. For example, most lenders don’t allow Disability Living Allowance, Attendance Allowance or Bereavement Support Payments. However, they may accept Income Related Employment Benefits instead.

You’ll need to apply for DLA separately through Jobcentre Plus and then ask your lender to add any payments received under DLA onto your mortgage agreement.

Buy-to-Let mortgage on Benefits

Most main street lenders won’t accept the Buy-to-Let mortgage application on benefits, but Some mortgage lenders could start your mortgage application. It is better to contact a mortgage broker for financial advice before starting your application for a buy-to-let property loan on benefits.

The Financial Conduct Authority do not regulate buy to let mortgages.


Mortgage on benefits with bad credit

Mortgage on benefits with bad credit scores is more difficult when compared to a normal application. This is because any mortgage lender tends to give the loans based on the borrower’s credit rating. An adverse credit score means to affect your affordability check process, which also means that lenders will consider failing you for failing in mortgage repayments. If you have a poor credit rating, you should probably contact some specialist mortgage brokers to help you with your application. At NeedingAdvice.co.uk Ltd, we can help you with the steps that you can take to positively improve your credit rating before starting the application.

Damian Youell

Feel Free To Start WhatsApp Chat With Us...

How We Work

1: We contact you and take down your details, income outgoings, name, address etc.

2: We will research the whole market and email you a detailed quote as well as a list of documents to proceed.

3: You upload the documents and information needed via our channel our online portal.

Feel Free to Contact Us

FAQs

Will benefits affect my chances of getting a loan or credit card?

Claiming benefits does not always affect the credit rating, but in some cases, it may reduce the chances of acceptance of your mortgage application. The reason is simple if you are claiming benefits it means you have a low income which mostly means that you have failed to meet the minimum income requirement for Credit cards or loans.


Does Universal Credit affect mortgage applications?

Claiming universal credit will not appear on your credit report, but it could affect an individual’s ability to get a mortgage. Contact some financial services before going for a mortgage if you are also receiving benefits like Universal Credit.


How Does Universal Credit Affect Your Credit Rating?

Receiving Universal Credit will not directly affect the credit report, but it could affect when you apply for credit cards, mortgages, or loans in future. Therefore, it is useful to consult financial services like NeedingAdvice.co.uk Ltd before your mortgage application on benefits like universal credit.


Does Universal Credit affect credit rating?

No, universal credit does not directly affect your credit rating.


Can you get a mortgage if you’re on benefits?

If you are receiving benefits such as job seekers allowance, disability living allowance, bereavement support payment etc., you cannot claim these benefits while applying for mortgages. It would help if you stopped taking them once you’ve applied for a mortgage. This is because the government wants people to be able to work and pay mortgage payments without having their finances affected by being unemployed. As you know that every mortgage lender has a different set of rules for affordability criteria for your mortgage application. Read more about mortgages on benefits here.


What benefits do mortgage lenders accept?

Some mortgage lenders might allow applicants to receive certain types of benefits. For example, they might allow those who are disabled to receive housing benefits. However, this depends upon what type of mortgage you want to apply for. In general, most mainstream banks don’t offer any kind of special treatment to borrowers who are on benefits. Instead, they just look at whether you can make regular monthly mortgage payments.


Which mortgage lenders include benefits?

Most major UK banks, including Barclays, HSBC, Lloyds Bank, Nationwide Building Society, Santander, RBS, TSB, Yorkshire Bank, Virgin Money, Halifax, Abbey National, Alliance & Leicester, Bradford & Bingley, Co-operative Financial Services Group, Clydesdale & Yorkshire Banks, Coventry Building Society, First Direct, HBOS, HSBC, NatWest, Northern Rock, Royal Bank of Scotland, Scottish Widows, Tesco Bank, Ulster Bank, includes benefits.


Does child benefit count as income for a mortgage?

Yes, many mortgage providers will take child benefits into account during the mortgage affordability assessment process.


Does a mortgage lender accept disability benefits?

Yes, a mortgage lender could accept applications from individuals who have been diagnosed with a long-term disability or condition which has made them unable to work. Some may even require proof of medical evidence confirming the diagnosis. If you need help finding out more about accessing benefits, don’t hesitate to get in touch with a specialised mortgage broker.


How much income do I need to qualify for a home loan?

The amount of income needed varies depending on the size of the property you wish to buy. Various Mainstreet lenders, such as Lloyds Bank, can give you a mortgage, but first, you need to contact a mortgage adviser for a suitable mortgage deal.


How do I find out whether I qualify for a home loan?

You don’t necessarily need to apply for a mortgage straight away – you might want to wait until you know exactly what type of property you would like to buy. It’s always better to consult financial services before starting your application.


How do I apply for a home loan?

You don’t necessarily need to go through any bank such as Lloyds Bank to access finance. Many different types of loans are available, including personal unsecured loans, secured loans, business loans, and commercial mortgages.


Does any lender accept benefits income for Buy-to-let Property?

Yes, some lenders may accept benefit income on a mortgage application for a buy-to-let property.


How much mortgage can I get on the basis of my annual income?

Typically, we can get a loan amount that is 4.5 times our annual income. It’s also better to contact a broker for better mortgage advice and cheaper interest rates. You can also read about our guide for buy to let mortgage income requirements in the next section.


Would my additional income and assets support my application for a mortgage with benefits?

Yes, there are good chances that your additional income and relevant assets may help you to support the mortgage application but it’s always better to contact an expert mortgage advisor for specialist advice.


Can I get a mortgage on benefits with a shared ownership scheme?

Yes, you can get a mortgage on your income from benefits with a shared ownership scheme that is also a part of the government’s affordable housing program.


What is the affordable housing programme by UK government?

This is a government initiative aimed at helping people who cannot afford to purchase their own homes. The aim is to provide affordable housing to those who need it most. This includes low-income households, young families with children, older people and disabled people.

FAQs – Mortgage Lenders that accept benefits2022-04-08T08:06:57+00:00

Will benefits affect my chances of getting a loan or credit card?

Claiming benefits does not always affect the credit rating, but in some cases, it may reduce the chances of acceptance of your mortgage application. The reason is simple if you are claiming benefits it means you have a low income which mostly means that you have failed to meet the minimum income requirement for Credit cards or loans.


Does Universal Credit affect mortgage applications?

Claiming universal credit will not appear on your credit report, but it could affect an individual’s ability to get a mortgage. Contact some financial services before going for a mortgage if you are also receiving benefits like Universal Credit. 


How Does Universal Credit Affect Your Credit Rating?

Receiving a Universal Credit will not directly affect the credit report, but it could affect when you apply for credit cards, mortgages, or loans in future. Therefore, it is useful to consult financial services like NeedingAdvice.co.uk Ltd before your mortgage application on benefits like universal credit. 


Does Universal Credit affect credit rating?

No, universal credit does not directly affect your credit rating.


Can you get a mortgage if you’re on benefits?

If you are receiving benefits such as job seekers allowance, disability living allowance, bereavement support payment etc., you cannot claim these benefits while applying for mortgages. It would help if you stopped taking them once you’ve applied for a mortgage. This is because the government wants people to be able to work and pay mortgage payments without having their finances affected by being unemployed. As you know that every mortgage lender has a different set of rules for affordability criteria for your mortgage application. Read more about mortgages on benefits here.


What benefits do mortgage lenders accept?

Some mortgage lenders might allow applicants to receive certain types of benefits. For example, they might allow those who are disabled to receive housing benefits. However, this depends upon what type of mortgage you want to apply for. In general, most mainstream banks don’t offer any kind of special treatment to borrowers who are on benefits. Instead, they just look at whether you can make regular monthly mortgage payments.


Which mortgage lenders include benefits?

Most major UK banks, including Barclays, HSBC, Lloyds Bank, Nationwide Building Society, Santander, RBS, TSB, Yorkshire Bank, Virgin Money, Halifax, Abbey National, Alliance & Leicester, Bradford & Bingley, Co-operative Financial Services Group, Clydesdale & Yorkshire Banks, Coventry Building Society, First Direct, HBOS, HSBC, NatWest, Northern Rock, Royal Bank of Scotland, Scottish Widows, Tesco Bank, Ulster Bank, includes benefits. 


Does child benefit count as income for a mortgage?

Yes, many mortgage providers will take child benefits into account during the mortgage affordability assessment process.


Does a mortgage lender accept disability benefits?

Yes, a mortgage lender could accept applications from individuals who have been diagnosed with a long-term disability or condition which has made them unable to work. Some may even require proof of medical evidence confirming the diagnosis. If you need help finding out more about accessing benefits, don’t hesitate to get in touch with a specialised mortgage broker. 


How much income do I need to qualify for a home loan?

The amount of income needed varies depending on the size of the property you wish to buy. Various Mainstreet lenders, such as Lloyds Bank, can give you a mortgage, but first, you need to contact a mortgage adviser for a suitable mortgage deal. 


How do I find out whether I qualify for a home loan?

You don’t necessarily need to apply for a mortgage straight away – you might want to wait until you know exactly what type of property you would like to buy. It’s always better to consult financial services before starting your application. 


How do I apply for a home loan?

You don’t necessarily need to go through any bank such as Lloyds Bank to access finance. Many different types of loans are available, including personal unsecured loans, secured loans, business loans, and commercial mortgages.


 Does any lender accept benefits income for Buy-to-let Property?

Yes, some lenders may accept benefit income on a mortgage application for a buy-to-let property.


How much mortgage can I get on the basis of my annual income?

Typically, we can get a loan amount that is 4.5 times our annual income. It’s also better to contact a  broker for better mortgage advice and cheaper interest rates. You can also read about our guide for buy to let mortgage income requirements in the next section.


Would my additional income and assets support my application for a mortgage with benefits?

Yes, there are good chances that your additional income and relevant assets may help you to support the mortgage application but it’s always better to contact an expert mortgage advisor for specialist advice. 


Can I get a mortgage on benefits with a shared ownership scheme?

Yes, you can get a mortgage on your income from benefits with a shared ownership scheme that is also a part of the government’s affordable housing program. 


What is the affordable housing programme by UK Governement? 

This is a government initiative aimed at helping people who cannot afford to purchase their own homes. The aim is to provide affordable housing to those who need it most. This includes low-income households, young families with children, older people and disabled people.


About The Author

mortgage broker damian youell



See some of Damian’s client reviews below

Damian is an experienced mortgage broker, founder of NeedingAdvice.co.uk Ltd and company director. With over a decade working as a mortgage broker he has a strong understanding of hard to place mortgage cases. With hundreds of 5 star client reviews. hundreds of repeat clients his work speaks for himself.

He started NeedingAdvice.co.uk as a one man band with the philosophy of putting clients needs ahead of his own. This ethos of offering excellent customer service has helped the business grow over the years. He gets satisfaction on getting cases pushed through to offer stage where other mortgage broker and companies have failed.

Throughout his time as an adviser he has carved out a niche area of advice helping clients with their business protection requirements too. Having helped hundreds of client with Relevant Life Policies, Shareholder Protection Insurance, Keyperson Policies and other important protection requirements of large to small businesses.

At home he is a family man and likes to spend his time with his four children and wife Lisa. He enjoys going on holidays spending time with friends and going for walks.

By |2023-10-25T08:10:57+00:00February 24, 2023|Knowledge Mortgages|0 Comments

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About the Author:

Company Director and NeedingAdvice.co.uk Ltd. Experienced mortgage broker offering advice and help to many hundreds of clients. Takes pride in getting hard to get agreed mortgages agreed for clients and often gets mortgage offers agreed where other brokers have failed. Also expert in business protection solutions such as relevant life policies, key person insurance and shareholder protection.

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