Moving home when on ESA (mortgage in place)

Anonymous_one

Hi

I'm currently living in my own home, and receive ESA and PIP. I get mortgage interest paid by DWP, for which I'm very grateful.
I hope to sell my house next year and downsize to a smaller 1 or 2 bedroomed home. I plan to clear my debts from the proceeds of the house sale, leaving me with a very modest amount left as deposit for a new home. According to my bank's mortgage advisor, I can port my mortgage, as long as I don't want to borrow more (which I definitely won't)

I have a couple of questions...

When I move, will my claim end and then I have to reapply as I'll be at a new address?

And to make things more complicated (sorry!) my daughter will be letting out her 2 bed house around the time I hope to move. If I can't find a property in my price range, could I rent from her and receive any benefit help at all until I find somewhere to buy? I'm guessing the answer is no, as I'll have too much money left from my house sale. I thought I'd check anyway ��

Thank you

antrobus

Anonymous_one wrote: »

..When I move, will my claim end and then I have to reapply as I'll be at a new address?...

No. You simply inform the DWP of your new address.

Anonymous_one wrote: »

...And to make things more complicated (sorry!) my daughter will be letting out her 2 bed house around the time I hope to move. If I can't find a property in my price range, could I rent from her and receive any benefit help at all until I find somewhere to buy? I'm guessing the answer is no, as I'll have too much money left from my house sale. I thought I'd check anyway ...

There is a capital disregard in respect of funds received from the sale of a home, where it is intended to use the money to purchase another home.

As to rent payable to your daughter. This is what Shelter says.

https://england.shelter.org.uk/housing_advice/housing_benefit/housing_benefit_renting_from_family

Anonymous_one

antrobus wrote: »

No. You simply inform the DWP of your new address.




There is a capital disregard in respect of funds received from the sale of a home, where it is intended to use the money to purchase another home.

As to rent payable to your daughter. This is what Shelter says.

https://england.shelter.org.uk/housing_advice/housing_benefit/housing_benefit_renting_from_family

Thank you, that's really helpful

TELLIT01

Anonymous_one wrote: »

Hi

I plan to clear my debts from the proceeds of the house sale, leaving me with a very modest amount left as deposit for a new home.

Clearing debts from the sale of the home might be considered to be deprivation of capital and could affect your entitlement to Income Related benefits.

Caz3121

Anonymous_one wrote: »

According to my bank's mortgage advisor, I can port my mortgage, as long as I don't want to borrow more

It may be worth enquiring more about this before making decisions
generally whilst the mortgage may be a portable product, this refers the the rate/deal and affordability would need to be assessed in the same way as a new borrower
there are a number of articles re those that have portable mortgages but have been declined on affordability
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11379234/Lenders-trapping-borrowers-who-want-to-downsize.html

Anonymous_one

Caz3121 wrote: »

It may be worth enquiring more about this before making decisions
generally whilst the mortgage may be a portable product, this refers the the rate/deal and affordability would need to be assessed in the same way as a new borrower
there are a number of articles re those that have portable mortgages but have been declined on affordability
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11379234/Lenders-trapping-borrowers-who-want-to-downsize.html

I think it will be fine. My current mortgage's 2 year rate has just ended, and I've just took out another 2 year rate with the same lender, which came into effect less than a month ago.. No checks were done affordability or otherwise,, and it was very quick and painless. The advisor was fully aware that DWP make payments.
I will double check in a few months time to see where I stand though.

IAmWales

Anonymous_one wrote: »

I think it will be fine. My current mortgage's 2 year rate has just ended, and I've just took out another 2 year rate with the same lender, which came into effect less than a month ago.. No checks were done affordability or otherwise,, and it was very quick and painless. The advisor was fully aware that DWP make payments.
I will double check in a few months time to see where I stand though.

A new product at the same address is entirely different to porting your mortgage. Porting is now assessed in the same way as a new mortgage, affordability will be checked. Some lenders accept benefits but I can't think of any that will offer new lending to a client whose sole income is benefits.

Anonymous_one

IAmWales wrote: »

A new product at the same address is entirely different to porting your mortgage. Porting is now assessed in the same way as a new mortgage, affordability will be checked. Some lenders accept benefits but I can't think of any that will offer new lending to a client whose sole income is benefits.

I'd better tell the mortgage advisor at Barclays that he doesn't know his job then!

TELLIT01

Anonymous_one wrote: »

I'd better tell the mortgage advisor at Barclays that he doesn't know his job then!

People are responding with their experiences, which may or may not be commonplace. Surely it's better to get absolute confirmation from your mortgage advisor than to find yourself in a position of having a new home but being unable to get a mortgage.

Caz3121

Anonymous_one wrote: »

I'd better tell the mortgage advisor at Barclays that he doesn't know his job then!

If you read this article you will see it is not uncommon for people to be reassessed by lenders when they port in the same way as taking a new mortgage
http://www.moneysavingexpert.com/mortgages/porting-your-mortgage

however, now you have stated the lender you can view their own rules which confirms they would consider
Like for like porting - Where an existing mortgage customer wishes to port their mortgage to a new property on a “like for like” (or reduced) basis and the lending proposition is outside of current lending standards, including affordability and “score”, such requests can be considered provided:
There is no increase to the current borrowing amount outstanding
There is no increase in the term of the current mortgage
All parties to the current mortgage remain unchanged
There is no arrears history within the last 12 months on the current mortgage (with the exception of technical arrears)

TELLIT01

I would suggest the most important section of that is where is say "such requests can be considered". In no way is that stating that every person wishing to port a mortgage will be successful. It does not say 'such requests will be permitted' if the conditions listed are met.