shared ownership property and housing benefit

Lipa

I am trying to get a mortgage on a shared ownership property. Would I be entitled to housing benefit? I am borrowing from my friends a sum of £7500 for a deposit.

Housing_Benefit_Officer

You will be able to claim for the rental element. Finances and rent charged will depend if you qualify.

leveller2911

Lipa wrote: »

I am trying to get a mortgage on a shared ownership property. Would I be entitled to housing benefit? I am borrowing from my friends a sum of £7500 for a deposit.

You may have problems getting a mortgage if your borrowing the deposit. The Banks will look into where the money has come from. Borrowing the deposit money is a black mark from a lenders point of view.

One option is getting your friends to write a letter stating the money is a gift and not a loan. The downside is if you lose the house your friends won't get their money back.

Lipa

Would I still be entitled to buy shared ownership property if I wasn't a council or housing association tenant?

helping_hand2014

leveller2911 wrote: »

One option is getting your friends to write a letter stating the money is a gift and not a loan. The downside is if you lose the house your friends won't get their money back.

would that not be classed as giving false information to the bank a to obtain a mortgage ?

Caz3121

Lipa wrote: »

Would I still be entitled to buy shared ownership property if I wasn't a council or housing association tenant?

have you actually looked into whether you would get a mortgage or not. Most lenders will accept a loan for deposit and you would need an income to qualify for a mortgage. If you have sufficient income to get a mortgage you may have too much income to receive housing benefit

HappyMJ

helping_hand2014 wrote: »

would that not be classed as giving false information to the bank a to obtain a mortgage ?

Yes but the letter would prevent the friend from taking any court action to recover the money and therefore the property could not have a charge placed on it....so it can be a gift. Any money given back to the friend would be as thanks there would be no liability to actually give any back. Maybe the friend doesn't want it to be considered a gift so would be unwilling to write this letter.

tomtontom

HappyMJ wrote: »

Yes but the letter would prevent the friend from taking any court action to recover the money and therefore the property could not have a charge placed on it....so it can be a gift. Any money given back to the friend would be as thanks there would be no liability to actually give any back. Maybe the friend doesn't want it to be considered a gift so would be unwilling to write this letter.

I can't see any genuine friend wanting to put someone in this position - asking them to give up all legal claim to their money so they can assist in committing fraud

Housing_Benefit_Officer

Recall a court case where parents and siblings gave son cash for deposit on property. Mortgage company insisted on those who gave cash to provide signed and witnessed letters that the cash was a non returnable gift. Years later parents and siblings went to court to prove they had a claim on the property - case was chucked out because the money they gave was a non returnable gift. Once you sign a letter stating the money is a non returnable gift it is no longer theirs.