The chances of you getting a mortgage if you’re on benefits will typically be greater if this money only forms part of your income. Lenders may include the full amount you receive in benefits as part of their mortgage affordability process, or a percentage, depending on their criteria.
Lenders will ultimately want to know whether you can afford the mortgage repayments, both now and if interest rates rise in future, based on a thorough look at all your income and outgoings. This includes whether you could continue to repay your mortgage if your personal, or wider circumstances changed, for example, if you lost your job.
Lenders may take into account the following benefits as part of your income when assessing whether to offer you a mortgage, but it’s worth checking before you apply, as their rules can vary:
Universal CreditAttendance AllowanceCarer’s AllowanceChild BenefitChild Tax CreditDisability Living Allowance (DLA)Incapacity BenefitIndustrial Injuries BenefitMaternity AllowancePension CreditSevere Disablement AllowanceWidow’s PensionWorking tax credit
If your income is solely from benefits, it’s a good idea to seek help from a specialist mortgage broker, as they will know which lenders may be willing to offer you a mortgage in these circumstances. This way, you avoid making applications which will be rejected once the lender assesses your situation, as this could damage your credit score and make it harder for you to get a mortgage in future.