On Benefits, Can I Get A Mortgage

popjoc

Hi,

I currently own my own home outright. I am on Benefits, but I am looking to release about £60000. The house is worth approx. £220,000.

I am receiving Pip at the higher rate for both parts, and ESA. My wife receives Tax Credits and Carers Allowance for me. I am guaranteed Pip for at least 5 years. But I would want a mortgage for about 10 years.

Is this a viable option. Credit rating is fair to good, and never defaulted on anything in our lives.

We have debt amounting to just over £50000, hence why we want to look at this as an option.

Does anyone have any advice, and many thanks.

ACG

There are lenders who would consider it, but like anything it comes down to the finer details. It might be worth a chat with a broker as most lenders also need an element of earned income.

macman

Are you really in a position to repay £416pm, plus interest, from your benefits?
At present, you and your wife have total security of tenure. Take a loan secured against the house, and you'll be homeless should you default.
Have you considered letting a spare room, if available? That could give you up to 7.5K annually, free of income tax.
I presume that your £50K of debt is unsecured?

BorisThomson

macman wrote: »

Are you really in a position to repay £416pm, plus interest, from your benefits?

OP will have a very good income on all that. The problem is that no award is guaranteed for the full term, so could be withdrawn at any time. Early reviews are not uncommon.

(Also tax credits will stop once the child leaves non advanced education.)

popjoc

Hi, I am currently paying about £1200 from benefits on debt as it is. Yes our own fault , but thank you for the advice.

csgohan4

equity release??

fatbelly

I would explore a debt management plan rather than converting unsecured debt to secured

enthusiasticsaver

I would also caution against converting unsecured debt to secured especially if you have no earned income. Most lenders will not lend based on benefits payments as they are not guaranteed and subject to being tinkered with by the government of the day. Ring stepchange and explore a DMP.