buying a house while on benefits

alisonnpaul

Iv'e been my wives carer for some 20 years + now my wife claims pip esa and full housing and council tax benefit.

we currently rent private but are in a position of having to relocate to social housing an underoccupancy bedroom tax would be charged we do require the extra bedroom so accept the charge we feel it could be as little as £55-£60 a month reduction in our housing benefit with this in mind we could look for a run down property for £20000 allowing us to get a 25 year mortgage and repay it back with a £60 payment 

my question is can we get a mortgage and are we allowed to do this agreeably the housing benefit would stop but feel it could save the council thousands in benefit payments 

Alice_Holt

£60 a month is unlikely not cover a 25 year repayment mortgage on a £20k property.
https://www.moneyhelper.org.uk/en/homes/buying-a-home/use-our-mortgage-calculator

What deposit do you have ?   How much is needed for repairs, etc?
How much for purchase costs, etc?
Is a £20k property habitable ? 


Most lenders would require applicants to be earning. Which lender have you approached ?
What interest rate will you be paying?

As a home owner your benefits will continue.
But would you have enough income to cover home maintenance costs?

Have you confirmed with the social housing provider / benefit calculator the exact HB shortfall ?
Have they done an affordability check ?
Can you apply for discretionary HB?

cutho

I don't know where you get £60 I  get  at least £67  and thats without  the interest.

Spoonie_Turtle

There is - or was - an exemption to the bedroom tax if you need the extra bedroom on the grounds of disability.  I don't know the specifics because a friend managed to get the exemption years ago, before I knew anything about benefits, but it's worth at least looking into. 

(That was for Housing Benefit specifically though; if you are moving to a different council area you would need to claim UC for help with housing costs and don't know of any exemption there.)

poppy12345

alisonnpaul said:

Iv'e been my wives carer for some 20 years + now my wife claims pip esa and full housing and council tax benefit.

we currently rent private but are in a position of having to relocate to social housing an underoccupancy bedroom tax would be charged we do require the extra bedroom so accept the charge we feel it could be as little as £55-£60 a month reduction in our housing benefit with this in mind we could look for a run down property for £20000 allowing us to get a 25 year mortgage and repay it back with a £60 payment 

my question is can we get a mortgage and are we allowed to do this agreeably the housing benefit would stop but feel it could save the council thousands in benefit payments 

It's not just about buying the house. How would you get the money to do the renovations needed? Once these are done what would happen if something went wrong? Would you have the money for repairs and maintenance?

MovingForwards

You've asked a few questions about mortgages and properties over several years. Why not contact a couple of brokers and see what options are realistically available to you?

With your current idea of a rundown property, it's doubtful you'd secure a mortgage on it. Lenders have a requirement that there's a functional kitchen and bathroom, with running gas (if installed), electric and water, without those you won't get a mortgage.

If you mean roof leaks, missing windows, walls removed / fallen down, there's no chance of getting a normal mortgage and you have to fund it.

Or do you mean a property with dated fixtures and fittings and taking a punt there's no hidden horrors. Those are easier to get mortgages on, but as poppy said how would you fund it? There's the option of trade paint and specialist paint for some areas, living with whatever the kitchen and bathroom looks like, but anything else will take time to save for.

As I said on one of your previous posts, contact housing associations and the council to see if they can place you both in a suitable property. 

FBaby

Have you accounted for the costs of repairs and maintenance?

In 25 years, you could have to have the roof done.

In 25 years, it's highly likely that interest rates will go back up.

alisonnpaul

Alice_Holt said:

£60 a month is unlikely not cover a 25 year repayment mortgage on a £20k property.
https://www.moneyhelper.org.uk/en/homes/buying-a-home/use-our-mortgage-calculator

What deposit do you have ?   How much is needed for repairs, etc?
How much for purchase costs, etc?
Is a £20k property habitable ? 


Most lenders would require applicants to be earning. Which lender have you approached ?
What interest rate will you be paying?

As a home owner your benefits will continue.
But would you have enough income to cover home maintenance costs?

Have you confirmed with the social housing provider / benefit calculator the exact HB shortfall ?
Have they done an affordability check ?
Can you apply for discretionary HB?

i we have a £6k deposit to get us off the mark we also have £4k maturing in 45 month 

poppy12345

alisonnpaul said:

Alice_Holt said:

£60 a month is unlikely not cover a 25 year repayment mortgage on a £20k property.
https://www.moneyhelper.org.uk/en/homes/buying-a-home/use-our-mortgage-calculator

What deposit do you have ?   How much is needed for repairs, etc?
How much for purchase costs, etc?
Is a £20k property habitable ? 


Most lenders would require applicants to be earning. Which lender have you approached ?
What interest rate will you be paying?

As a home owner your benefits will continue.
But would you have enough income to cover home maintenance costs?

Have you confirmed with the social housing provider / benefit calculator the exact HB shortfall ?
Have they done an affordability check ?
Can you apply for discretionary HB?

i we have a £6k deposit to get us off the mark we also have £4k maturing in 45 month 

Some local Authorities have savings limits of maximum £6,000 to be entitled to council tax reduction so if you have this amount of savings have you reported the changes? the minimum savings limit for housing benefit is £6,000 so there's a reduction for every £250 or part there of over that amount.

MovingForwards

£6k will go towards your deposit, legal fees and any broker / mortgage fees, with some left over to cover moving costs.

£4k wouldn't even scratch the surface of a property needing modernising, let alone a proper rundown place.

I've purchased a property costing nearly 4x your proposed price. It's barely been touched in decades. I'm not naive to think I won't need to plaster the walls when I start taking the wallpaper off. At some point I will have to take the ceilings down before they decide to come down in places and probably at the wrong time. My plumbing is original from when a bathroom was fitted. 

I came into this purchase with my eyes wide open, knowing I will require about £5k per room. Structurally the property is fine, but the wrong storm could change that.

I'm lucky as I can work and save each month, but I'm racing against the clock to get the money together and start the project, knowing at any time the project could decide to start itself.

I say this as a disabled person, I'm not looking forward to living here when the work starts, but financially I won't have a choice.

Sncjw

I would say its unrealistic for you to get a 20k morgate for 25 years. I don't think they lend les than a certain amount. 

Some lenders accept pip as some income I know mine did but I am working also.  

You would need to pay mortgage Pkus interest, your council tax, food bill, repair bills, electricity and gas.. Moving costs, survey fees, solicotr fees, land registry fees.

Plus you need to add on your daily living costs. It's also not garuntteed to have the benefit income too