If you receive PIP or are in the process of applying, you may have seen that DWP intend to bring in some changes to the receipt of PIP benefits and their assessments. 

The changes come as part of the Health Transformation programme. This proposes having a "single assessment" approach for all benefits that use a functional health assessment. So, this includes PIP assessments and WCA for Employment Support Allowance (ESA) and Universal Credit. Going forward, the contracts will be Functional Assessment Services contracts, and this will see the same external company carry out both types of assessments in a certain area of the UK.

So what does this mean for obtaining mortgages on benefits, and is that even possible?

What benefits count as income for a mortgage?

The below benefits can be included as income with many UK lenders but ask a mortgage broker to highlight the lenders that accept 100% benefit income or part income from benefits before making a formal application.

• Attendance Allowance
• Carers Allowance
• Child Benefit
• Disability Living Allowance (DLA)
• Incapacity Benefit (IB)
• Industrial Injuries Benefit (IIB)
• Maternity Allowance
• Pension Credit
• Severe Disablement Allowance
• Widow’s Pension
• Universal Credit

Finding the right lender for a mortgage if you receive benefits

It’s not all about upfront costs though, a good mortgage broker looks at the terms and conditions of a contract and compares them against other lender agreements to find the most suitable arrangement based on your circumstances.

Some mortgage agreements offer more flexibility for making overpayments, which can save you money in the long run whereas others might have a lower fixed interest rate but offer less flexibility, charging higher early repayment fees or early exit fees. With so many factors to consider carefully, check reviews and get advice from a broker with experience in getting people a mortgage with income from benefits

How much can I borrow for a mortgage that accepts income from benefits?

Most lenders will look at your annual income and multiply it by 4.49 or above depending on the lender and your circumstances. So if your income from a job is £14,000 a year and you receive additional income from benefits of £2,000 a year, a lender may combine this figure and times it by 4.49 to determine you could borrow a maximum of £71,840 on a single person’s mortgage.

Joint mortgage while on benefits

If you’re planning on applying for a joint mortgage with a partner, both incomes will be taken into consideration. For example, your total annual income of £16,000 and your partner’s hypothetical annual income of £18,000 equates to £34,000. When multiplied by 4.49, this could give you a maximum loan of £152,660.

Well, now you might be wondering – where can I get a property for £71,000 to £152,000.

We accept buyers with mortgages, and you might find our property prices more that reasonable. Some of our properties start from about £50,000! Though admittedly they could use a little care and attention.

Rental prices are on the rise, the wiser choice to keep your costs down is to get a mortgage. Why not have a look at our properties here and see what properties you can afford with us? 

Call us or send us an enquiry.