Getting a mortgage with child tax creditsIncome received by borrowers in the form of child tax credit... is not as simple as we think. It requires you to have the right information and know how to use it.
The first thing that you need to do is find out if you qualify for this type of mortgage. You can check your eligibility by going online to the Department of Revenue’s website at the UK Gov website. If you are eligible, you can apply for a mortgage with a child tax credit.
The next step is to fill up an application form. This is where you will provide all the necessary details about yourself and your family. You must also include copies of your most recent pay slips, bank statementsA record of a borrower's financial transactions often requir..., proof of income, and other documents that may help determine your ability to repay the loan.
Over the years, we have received many enquiries regarding mortgages with child tax credits. So, in this article, we will explore the possibilities of getting a mortgage with child tax credits. We answer the questions such as can I get a mortgage with child tax credits, do child tax credits count towards the mortgage, do mortgage lenders take child tax credits into account etc.
Can I Get A Mortgage With Child Tax Credits?
Yes, you can get a mortgage with child taxes credits. The good news is that there are several options available when it comes to getting a mortgage with a child tax credit.
You can either go through a direct lender or a broker. Direct lenders are banks that offer loans directly to borrowers. They usually charge higher interest rates than brokers. Brokers act as intermediaries between the borrower and the lender. They receive commissions from both parties.
You can choose to borrow from a government-backed lender like the National Housing Federation (NHF) or the British Bankers Association (BBA). These lenders are backed by the government, and they offer competitive rates. However, these lenders only lend to people who meet specific criteria. For instance, you cannot borrow more than 80% of your home value.
Another option is to borrow from a private lender. Private lenders are independent financial institutions which offer their services to individuals. They are not regulated by the government, and therefore, they are free to set their own terms and conditions.
The first that you can do is to contact a specialist mortgage broker before starting any mortgage application process. A mortgage broker can help you to find the most suitable mortgage deals.
How Much Can I Borrow With Child Tax Credit?
The amount that you can borrow depends on the size of your mortgage. In general, you can borrow up to 75% of your property value. However, some lenders allow you to borrow up to 90%. It is always better to consult a mortgage broker before directly going for the lender.
What Is The Difference Between A Mortgage And A Home Equity Loan?
A mortgage is a long-term debt, whereas a home equityThe difference between the value of the property and the amo... loan is short-term. Both types of loans are secured against your home. But, while a mortgage has a fixed repayment period. A home equity loan does not have a fixed term. Instead, it has a variable rate. Therefore, if you decide to refinance your home, you can change the repayment period of your home equity loan.
Do Child Tax Credits Count Towards My Mortgage Repayment?
Child tax credits are a benefit provided by the government to parents who have children under 18 years old. If you qualify for child tax credits, then you may be able to claim them when you apply for a mortgage.
However, the amount of child tax credits that you can claim depends on how much money you earn. For example, you can claim 25% of your income above £16,190 per year. This means that if you earn £20,000 per annum, you can claim £5,100 in child tax.
If you want to know whether you can use your child tax credits towards your mortgage payment, you need to check with your lender. Some lenders will allow you to use your child’s tax credits, but others won’t.
Can I Use My Child Tax Credits To Pay Off My Mortgage Faster?
Yes, you can use your child’s taxes credits to pay off your mortgage faster. When you take out a mortgage, you must make monthly payments. If you don’t, you could end up paying more than what you originally borrowed.
For this reason, you should try to pay off your mortgage as quickly as possible. One way to achieve this goal is to use your child tax credits to reduce your monthly repayments.
When you use your child’s tax credits, you will get a lump. This lump sum will be used to reduce your monthly repayment. As a result, you will save interest charges.
You can also use your child’s tax credits in other ways. For example, you could use them to buy furniture or appliances for your house. Or, you can use them to improve your home.
Do mortgage lenders take child tax credits into account?
Most mortgage lenders will consider your child tax credit when they assess your ability to repay your mortgage. They will look at your total household income and compare it with your mortgage repayments.
They will also look at your personal circumstances, such as your age, employment status, marital status, number of dependents, and so on.
Are There Any Other Ways Of Using Child Tax Credits?
There are many other ways of using your child’s tax credits. You can use them to:
Buy a new car;
Improve your home;
Make improvements to your garden;
Purchase items for your home;
Cover the cost of moving from one place to another;
Cover the cost associated with buying a second homeA property that is purchased as a second home or holiday hom...;
Reduce your utility bills;
Increase your savings;
Cover the cost involved in starting a business;
Pay for private education;
Pursue further studies;
Fund an overseas holiday;
Help fund a family member’s medical treatment;
Fund a funeral;
Provide financial support to a charity;
Or any other purpose that you think would help you meet your goals.
Next Steps – Mortgage with child tax credits
If you are interested in getting a mortgage with child tax credits, you can contact our team of expert brokers.
We can help you to find the most suitable mortgage lender as per your requirements.
Our expert brokers will guide you through the process of applying for a mortgage with child tax credits.
Once you have found a lender who meets your needs, we will then work with you to apply for a mortgage.
The next step involves completing a loan application form. We will then send you a copy of the completed form.
After you have submitted your application, we will review it and let you know if there are any issues with your application.
If everything looks good, we will then prepare a contract between you and us.
This contract will outline all the terms and conditions of your mortgage agreement.
After you have signed the contract, we will then submit your application to the lender.
Your lender may ask you to provide additional documents before approving your application.
Once your application has been approved by your lender, we will then arrange a date for you to sign the final paperwork.
FAQs – Mortgage with Child Tax Credits
Can I get a mortgage with tax credits?
Yes, you can get a mortgage with tax credits. You can even get a mortgage with a child tax credit if you want. However, you need to be aware that some lenders may not accept applications from people who have used their child tax credits to pay off debts. So, make sure that you tell your lender about this when you apply for a mortgage.
What is universal credit?
Universal CreditA government benefit that replaces several other benefits, i... is a government scheme designed to simplify the benefits system. It replaces six separate benefit payments (income-based jobseeker’s allowance, income-related employment and support allowance, housing benefitIncome received by borrowers who receive housing benefit., council tax reduction, working tax credit and child tax credit) into just two monthly payments called ‘the weekly amount’ and ‘taxes and national insurance.
How does Universal Credit work?
You will receive a single payment each month instead of receiving several different payments throughout the year. This means that you don’t have to worry about remembering to claim multiple benefits or making multiple claims. The money you receive will be paid directly into your bank account.
Can I get a mortgage with universal credit income?
Yes, you should be able to get a mortgage with a universal income. If you do decide to use the universal income to pay for your mortgage, you will still need to complete an affordability assessment. Read more about getting a mortgage with universal income in our blog.
What happens after I’ve applied for a mortgage with universal credit?
When you apply for a mortgage with universal credit income, you will usually be asked to complete an online application form. Once you have done so, you will be sent a confirmation email which contains information on how to access your application. Your lender will also contact you to discuss your application and answer any questions you might have. They will then either approve or decline your application.
If they approve your application, they will send you a letter confirming this. You will then be required to sign the contract and return it to them within 14 days.
If they decline your application, they will give you reasons why. You will then need to take these reasons into consideration when deciding whether to reapply for a mortgage with universal credit or not.
Do I need to declare my income when applying for a mortgage with universal credit income?
No, you do not need to declare your income when applying for a loan with universal credit income. However, you must always declare your income when applying.
Are there any other things I need to know before applying for a mortgage with a universal credit income?
The main thing you need to remember when applying for a mortgage is that you will need to provide proof of income. This could include:
A statement from your employer showing your earnings
Income tax returns
Housing Benefit Documents if available
Proof of savings
You will also need to show that you are eligible for a mortgage as well as prove that you can afford the repayments. For example, if you want to borrow £200,000 over 30 years at 3% interest, you would need to demonstrate that you earn around £20,000 per annum and save around £2,000 per annum.
If you are self-employed, you may be asked to provide evidence of your business profits.
If you are renting, you will need to show that you have enough money saved up to cover your rent for 6 months in case you lose your job.
Can I get a mortgage with child benefit?
Yes, you can get a mortgage with child benefits. Child benefit is paid to parents who have children under 18. It is usually paid monthly and is based on your annual income.