can you get a mortgage on disability benefits uk?

April 17, 2024

40
Yes, it is possible to get a mortgage on disability benefits in the UK. Lenders are required by law not to discriminate against borrowers due to disability, and disability benefits are considered a legitimate source of income by many mortgage providers. However, securing a mortgage on disability benefits can come with its challenges and may require careful planning and consideration.

Income Consideration: 

Disability benefits, such as Disability Living Allowance (DLA), Personal Independence Payment (PIP), or Employment and Support Allowance (ESA), are recognised by many lenders as part of your total income. However, the key factor for lenders is the total income amount and its stability, which must be sufficient to cover mortgage repayments.

Affordability Tests: 

All potential borrowers, regardless of income sources, must pass the lender’s affordability tests. These tests assess whether you can afford the mortgage payments, especially considering other living costs and financial commitments.

Credit Score: 

Your credit score is also a critical factor in mortgage applications. Having a good credit history can significantly enhance your chances of being approved for a mortgage. It’s advisable to check your credit score and improve it if necessary before applying.

Deposit and Loan-to-Value Ratio: 

The amount of deposit you can put down can affect your mortgage application positively. A larger deposit reduces the risk for the lender and can also help in securing a mortgage with better terms.

Use of Guarantors: 

Some applicants on disability benefits may also consider using a guarantor to strengthen their application. A guarantor agrees to cover the mortgage payments if you’re unable to do so, providing additional security to the lender.

Specialist Lenders: 

Some lenders specialise in mortgages for people with non-traditional income sources, including benefits. Working with a specialist lender or a mortgage broker who understands the nuances of such applications can be beneficial.

Government Schemes: 

Explore government schemes aimed at helping people with disabilities become homeowners. For example, schemes like “Help to Buy” or “Shared Ownership” might offer viable paths to purchasing a home.

Professional Advice: 

Consulting with a mortgage broker can be incredibly helpful. They can provide advice tailored to your specific circumstances, help find suitable lenders, and assist with the application process to maximise your chances of approval.

Conclusion:

Obtaining a mortgage while on disability benefits in the UK is certainly feasible. It involves demonstrating that you can manage the mortgage repayments within your financial means. It’s important to prepare thoroughly, consider all available assistance, and seek professional advice to navigate the mortgage application process effectively.

Answered by:

Alison Gibson

Ascot Mortgage Expert

Last Updated:

17.04.2024

Answered by:

Alison Gibson

Ascot Mortgage Expert

Last Updated:

17.04.2024

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