HOMEBUYERS who claim Universal Credit or other benefits could find it hard to get a mortgage – but it's not impossible.
Some banks refuse to lend to benefit claimants, but others will consider your application.
Eligibility differs depending on the bank, and some will accept your application – depending on your financial circumstances.
That's because they're concerned about a borrowers ability to repay their mortgage.
Karen Noye, a mortgage expert at wealth management firm Quilter, said: "It's certainly possible to get a mortgage while on Universal Credit, but it will depend on the individual's specific financial circumstances and not all lenders will consider borrowers in this position."
For example Metro Bank and Yorkshire Building Society accept state pension benefits but not Universal Credit.
But HSBC and Lloyds Banking Group will consider mortgage applications from benefit claimants including those on Universal Credit.
"All mortgage lending decisions are based on affordability and income must meet certain criteria," a HSBC spokesperson said.
Most read in Money
CHOCAHOLIC 
Savvy shopper spots Heroes and Celebration tubs on sale at Co-op for just £1.25
Half a million forced to apply for more jobs or risk Universal Credit cut
I spent £1 in Poundland and figured out how to make £713 profit in seven days
Sick note rule change for millions on Universal Credit and benefits
Whether or not your application is successful will depend on whether you have other types of income or assets as well as the benefits.
You'll have to prove that you can keep up with the repayments.
Some banks will include specific conditions in their offer, such as only allowing you to use a certain percentage of your benefit payments to cover the mortgage.
You should find a mortgage adviser to help you find a suitable provider who will consider your application.
They'll also be able to find the best value deal for you.
“It is important to look at any potential deal in the round as the cheapest deal does not always represent the best value," Karen told The Sun.
"Some mortgage deals offer more flexibility for making overpayments whereas others offer a lower fixed rate deal but might charge early exit fees or are generally less flexible.
"Someone’s specific financial circumstance will dictate what the best option is and a mortgage adviser can be critical in helping someone come to this decision.”
We spoke to a mortgage expert who explained how to save thousands of pounds and avoid rising inflation.
A mortgage broker shared her top tips for first time buyers and another property guru revealed the big mistakes people make before buying a house.
Source: Read Full Article
