Remortgage on Income Support

Kazonline

Hi all, first time posting on here so hello ;-)
Does anyone know of a lender that will offer a mortgage to someone on income support?
My promotional period is about to end on my mortgage and while they (halifax) are willing to offer me a new promotion it isn't brilliant. The best I can get for a two year tie in is 5.29% fixed or 4.99% on tracker (based on BofE base rate of 4.5%). I am currently on Income support (despite working credits etc I can't afford to work and had to give it up last year). The property is currently worth approx £140k and the mortgage is approx £70k. I have credit card debts (from trying to keep going while working!) of £12k, which I would also like to consider putting on to the mortgage.
Anyone have any ideas where I can try? Thanks, Kaz.

MortgageMamma

Do you have a partner on the mortgage who works? how do you afford the mortgage on income support?

Kazonline

Thanks for your reply. No, I don't have a partner, it's just me and the three boys (& dog). As for meeting the mortgage payments initially it was hard, but after 9 months Income support now pay a portion of the interest, I then pay the rest. I earn a small ammount working part time (all declared and above board) which mostly covers the luxury of having a car, and get to keep a little of the maintenance that is received. As I don't smoke, drink etc and am quite good with shopping I am able to make the additional payments, but am struggling with the credit card payments.

Ted_Hutchinson

I am afraid that Income Support will only continue to pay your mortgage interest at the current rate, it may still be better to put your credit card debts on the mortgage but don't expect the DWP to increase their contribution.
Other building societies will accept benefit income as the basis for a mortgage however you may find that using a mortgage broker will be the best way to go as they will have experience of who treats this kind of income more leniently.

Kazonline

Thanks for your advice Ted. In all honesty the situation is far better than I had feared a few weeks ago, and it's only thanks to this site that I have had the courage to start 'facing my demons'. I didn't think that even my own mortgage company would offer me a fresh deal. I have checked with Income support and they confirmed that they will pay the same contribution regardless of whether I move/increase my mortgage - the only exception being if I borrow more money to carry out 'essential' work (eg my back door which is a big security risk and lets in water) they would consider contributing to the interest payment on that (which I thought was really good).
I should really have sorted this sooner - but as I said, I didn't think I was going to get anywhere so stuck my head in the sand.
I have to make my descision tomorrow or go onto the high rate with Halifax for the next month (6.5%)- what do you think of the rate's they're offering me (5.29 fixed, 5.19 variable) especially given my situation? Is there much of a chance that I'll get a better deal or should I maybe just go with this and hope that my history with them (2 years) will improve my chances of getting a further advance?
Thanks again for your advice, Kaz

Kazonline

Just spoken to the Halifax and they have said that they won't give me a further advance while on Income Support - understandable from their point of view, but frustrating as I know that I have a higher and more reliable income now that when I was working (and they were prepared to loan me more then). Guess I'd better get ringing around a few brokers.

Voyager2002

Kazonline wrote:

I have checked with Income support and they confirmed that they will pay the same contribution regardless of whether I move/increase my mortgage - the only exception being if I borrow more money to carry out 'essential' work (eg my back door which is a big security risk and lets in water) they would consider contributing to the interest payment on that (which I thought was really good).

Kaz, check this out very carefully -- Income Support staff do sometimes make mistakes that can cost claimants dearly.

AFAIK you only receive help with mortgage interest once you have been claiming income support for 9 months, and under certain circumstances you then have another 9-month waiting period. You may find that moving your mortgage to another lender would mean another 9 months without IS paying towards mortgage interest -- not worth it!

Anyway, I suggest that you get a list of good deals with other lenders and then go back to your lender, asking them to match those deals and giving the impression that otherwise you will switch. You might find that they would then come up with a special deal, just for you.

regularsaver1

no those deals with Halifax will stick regardless of whether you can get deals elsewhere

remember to leave Halifax these will be fees, so will it be beneficial
there is a 5.8% product that you can go onto in the mean time rather than 6.5% - standard, but not fees, or early repayment charges. where as the 5.19% ect will tie you in

dippy-dora_2

Hi, sorry skipped to the bottom.

I got my latest mortgage on income support.
if you already have a mortgage they wont pay towards the housing costs on more than you currently owe to pay off your mortgage.
ie: if you owe 20,000 on a current mortgage they will give you help on a new mortgage for 20,000

The mortgage company will consider giving you a mortgage as long as you can show how much income you bring in, and they do count benefits.
I'm not saying all will, but mine did as I had been with them a long time so there was trust that I was a good payer (they did refuse at first but I used my womanly ways and a few tears and they agreed!). They even said I could have a bigger mortgage, but bear in mind how much help you will get for housing costs.

Also bear in mind that if you lose your income support you get no help with your mortgage as has happened to me.

All you can do is try, and ask, and it's worth doing so.

dippy-dora_2

Ps mine is with Nationwide, so try them.

Kazonline

Thanks again all for taking the time to give your advice, it's really appreciated. I did call a broker yesterday but he said that in all honesty he would find it hard to find a company that would lend to income support and then beat the mortgage. As for a company that would lend me even more - virtually impossible. So, I bit the bullet last night and called Halifax and took out a two year tie in.
Now to tackle the credit card debts.... ;-)