Can unemployed people get mortgages?

EltonJohnFan

Hi all,

Just a quick query I have. I'm currently unemployed and not having much luck in finding work but I'm also very badly disabled which means it's a lot more difficult than you might expect to find work but also to find something I can do that's not limited by my disabilities. I'd like to purchase a property but I'm not sure if being unemployed would count against me. I don't really have a credit history but I do have around £10,000 in savings and have claimed Contributions Based Jobseekers Allowance for just over six months (due to change to Income Based) and I also receive Disability Living Allowance of £66.75 per week on a lifetime award. I should note that my previous award was Higher Rate Care and Mobility and I was told to appeal the decision to lower me to Middle Rate Care and Lower Rate Mobility but in doing so make my award a lifetime one. In all I currently have a weekly income of £200.25 and could easily meet my repayments on a mortgage as I'm a frugal person by nature and enjoy saving. I'm not a man of expensive tastes and lead a relatively simple life.

I'd like to move into disabled accomodation with support staff that would be on call for me 24-7 if need be. This accomodation can be part funded by the council due to the severity of my disabilities but they have stated that they would require me to fund part of this acommodation if I'd like to have it permanently and I have no problem with that but my worry is that I won't be able to get a mortgage because I'm not in work and don't really have the credit history, could you tell me more? am I wasting my time in all of this? I looked into a similar move about a year ago and as time goes by (and I worsen) it seems like the logical thing to do right now. I've never dealt with mortgages before so I don't know where to start but I have checked RBS and they seem to offer reasonable deals. I need around £45,000 and I'm very much a newbie in all of this but I want to know as much as possible and I'm sure you're the people to help me. Thank you very much

Francesanne

Sorry I can't offer any help re mortgage situation but I truly wish you all the best. I'm just amazed that your council can't fund you 100%. Seems very hard considering your health problems. Good luck & I hope you get the accomadation you want & need,

EltonJohnFan

Francesanne wrote: »

Sorry I can't offer any help re mortgage situation but I truly wish you all the best. I'm just amazed that your council can't fund you 100%. Seems very hard considering your health problems. Good luck & I hope you get the accomadation you want & need,

Hi,

Thank you for your support. I guess I'm just really unlucky in that my local council doesn't have a lot of money right now and though they've offered to part fund the move they have told me that they simply don't have the funds available to pay for everything. I have been offered the option of another shelter but that means I won't have someone on call 24-7 and you'd only have a team that can respond to emergencies but aren't actually in the building and that isn't good for me at all because I require someone to be there for me at all times. I have seen the place they can offer me, the one I'd have to pay towards and I'd really like to live there. The staff were very pleasant to me when I visited and the surroundings are beautiful but my worry is I won't be able to get a mortgage and will have to remain in my current council property which is unsuitable for my needs. The local council accept this situation but it's all they have available and they have done everything possible to make the necessary adjustments to the property but I feel that this move would be a good thing for me and I could hopefully be around other people that are in a similar situation to myself and we could maybe support each other. I feel like I don't have any support right now and though I have a carer that visits daily it's not the same as actually having the security of someone being there 24-7.

wodgerdodger

I am really sorry to pour cold water on your situation but I really don't think that there is a real possibility that you would able to realise your ambition
There are two aspects a Lender would look at; firstly your ability to pay the loan and the source of income and secondly the property the loan would be secured against.
I am afraid that your source of income, principally benefits, would make it extremely difficult to find a Lender who would accept all or some of the benefits unless they would be guaranteed indefinitely by the respective benefit agency. Additionally it would be almost impossible to get a mortgage on the type of accomodation you describe.
The Lenders take the approach that if they had to take possession for whatever reason, could they readily realise their loan in an open market situation. From your description this is a specialist property which would have limited attraction for a Lender and probably be extremely difficult for them to have good title to from a legal perspective to lodge their legal charge at he outset.

It might be useful if you could find out if any existing residents do already have mortgages and contact those Lenders or secondly ask the owners, presumably the local authority, if they have any schemes/Lenders in place who might provide this additional funding you need .

I wish you all the luck in your search and only regret that I cant offer you more hope in your difficult position.

mostlycheerful

Yes, what wodgerdodger says clarifies quite a lot. And answers some of what I've said below. Yes, unfortunately, that's why it's not very doable.

I was still writing the following so now I've just seen the previous post, and, yes, those issues do kind of rule out some of what I say below. But nevertheless I think that what I've said is still at least partially valid and hopefully may be of some use so I'm not going to attempt to edit it, well not for the moment just yet.

“In all I currently have a weekly income of £200.25 and could easily meet my repayments on a mortgage as I'm a frugal person by nature and enjoy saving. I'm not a man of expensive tastes and lead a relatively simple life…it seems like the logical thing to do right now.”

Well, yes, indeed, why shouldn’t a disabled unemployed person be able to use their money to service a mortgage?

And I suppose that you are currently paying rent to a landlord so, again, someone in your position should be given the option of changing to a mortgage instead if they want to.

Plenty of people with mortgages go on benefits and then get their mortgage paid by the benefits and it doesn’t particularly necessarily make much or even any difference to a mortgage provider whether the repayments are coming from work or benefits.

So in a sense it could perhaps be argued that to deny someone a mortgage because they are on benefits, and particularly someone disabled as in your case, would be a type of discrimination.

It makes no difference to the state if the benefits are paid to an individual to pay a landlord or to pay a mortgage – so why not?

Benefits are pretty much as reliable a source of funds as are wages, they both fail occasionally but both of them are mostly steady – so why not? And in fact benefits are probably mostly more reliable and stable than earnings as, obviously, people on benefits are not subject losing their jobs in the way that wage earners are.

Perhaps there might be some charities, churches or philanthropists who could help.

Perhaps a creative imaginative person in a charity or a church or a private individual could be persuaded to front the £45k you need and then you pay them rent to the same amount as they would get if they were a mortgage provider ie somewhere in the region of 1% to 6% p.a. which are the current most common rates of mortgages. In this scenario as they own the £45k worth of property it’s not particularly much or any risk to them except that of course they’ve got to sell the £45k stake when you move on or carry on with another renter. Hopefully somewhere there might be a charity, church or charitable person who would consider doing this to be worthwhile charity work to help someone in your position do something sensible and useful and which increases your quality of life, which you need more than non disabled people as you are disabled. The whole point of charity is to help people in need, isn’t it. So why not?

Alternatively could they take out £45k worth of mortgage in their own name and then as a charitable action let you live in it and pay them the same amount of the mortgage that they are paying? Either in a deal that makes this explicit and lets you own the £45k stake. Or perhaps it would be simpler for you just to pay rent to the same amount that the mortgage is costing. Except that I like the idea that you can get to own a bit of property yourself rather than just having to rent. Just cos you’re unemployed and disabled I don’t see that therefore you should only be allowed to rent, on the contrary, if you want to own then I think you should be encouraged and the possibility should be made available for you. For most people owning is a good thing that enhances their lives and so that should be made available for unemployed and particularly disabled people as well.

Or what about mortgages for disabled people on benefits, a new type of lending by mortgage providers, for people such as yourself? It would require some thinking out of the box for a lender to want to go in this direction, but why not? Well, I suppose there are probably arguments against such a thing due to risk management and such like.

I suppose people must have thought of this before. But maybe no one’s tried. Or maybe in fact no one has actually ever raised this question before and everyone just accepts being disabled and unemployed therefore means no borrowing, not credit cards, loans or overdrafts and let alone mortgages. And especially not now we’ve got credit crunch recession.

I suppose that an obvious argument against the government letting people on benefits take out new mortgages while on benefits is that that would make going on benefits more attractive to people but, of course, the government wants to discourage people from being on benefits in order to try to motivate them to get back to work if they can. Benefits is supposed to be a safety net for when people are in need, not a lifestyle choice instead of work or financing yourself.

Anyway, I think it might be worth your while approaching various charities and churches and generating publicity asking for philanthropists to help and if presented with the obvious logic and perhaps also some or all of the above arguments in favour then perhaps someone might step forward.

And maybe start your own facebook page asking for help. You might just get ignored or get abuse but alternatively you might find someone who is able and willing to help. Similarly perhaps look into putting up your own request on the justgiving website and or some of the other similar ones.

And perhaps it might even be worth writing to your MP to highlight the logic of your proposal and that perhaps the system should be catering for people in your position in this manner. The state is supposed to help people in need and all you’re asking for is a relatively small mortgage of £45k so that you can afford to live somewhere that you need due to your disability, so it’s not a huge thing that you’re asking. It’s reasonable for you to ask.

And maybe one or two local and maybe also even national newspapers would carry your story if it was presented in the right way to the right editor or journalist and if it happened to chime in with the kind of social issues stuff that they cover. Obviously it’s probably hard to get any attention off national press and even getting a local paper to carry your story might be difficult. But probably worth a try. It’s only a few letters and or emails so it’s not necessarily a lot of effort to try. And, who knows, if you could generate some publicity about the matter then perhaps someone might step forward and make the effort to make this happen for you. Maybe. Probably worth a try.

Possibly it might be worthwhile cross posting this thread in the charities boards as, of course, that’s where most of the charity people are looking. If doing so then maybe copy most or all of this post as well. Or rewrite the points I’ve made if you think some or all of them might be of use.

Yes, you might possibly achieve this if you keep at it. Of course you might not, so perhaps don’t get your hopes up. But it’s probably worth a try. There’s only one way to find out and that’s to get on the case and ask everywhere. And don’t give up until you’ve put in lots of effort.

Yes, I think it would be great if you could get a mortgage or raise the £45k another way.

And if you manage to make any headway then it could perhaps also be of help to other people as well.

If I think of anything else that might be relevant to say about this then I’ll post again here. And I’ll check in case you also post on the charities board and if I’ve got any more ideas I’ll post there as well.

Hope this helps your thinking. Let us know how you get on. Good luck.

BLT_2

Lets be honest, this is pretty much a non starter, the OP wants a mortgage company to lend him 5 x his annual income on a part owned property based upon income support. I doubt there are many companies out there who will sign up to this

Morglin

Certain banks and bulding socities did used to supply mortgages to those on sickness benefits (but not if they were only on Income Support), but I would imagine in today's climate that has changed - even those working often have problems securing them.

DIAL might be able to advise you as to what is your best course of action:

http://www.dialuk.info/

Lin