Benefits - housing , tax credits, mortgage????? Tearing hair out!

[Tullippa]

Hi

I will be as brief as possible, in a right pickle, my husband and I have separated and have a joint mortgage. Our house is now on the market, we are reasonably amicable, trying our best for the sake of the kids, 7 and 10.

I've seen a perfect house for me and my 2 children - local, near friends and school, but don't think I can qualify for a mortgage, even though in theory I should receive 40k which would act as my deposit.... I need a 60000 mortgage.

Today when the broker took down my earnings (13086 pa), and other basics like dependants etc. They said even the most generous wouldn't lend to me, (broker - London and country recommended by Martin Lewis -whole of the market), but some details they don't have access to, so I did my own online calculator ..And refused again.

I asked broker to then apply as if no dependants living at the address, and it then altered to 55k to 60k, but said there are further checks then like credit scoring etc, so absolutely no guarantee. I could do that way, but messy as when they do statements and stuff they would see child benefit receipt and question why applied on basis as no children living with me.

i have done a benefits calculator and it seems because I am considered lowish income (with two children) then I am provisionally entitled to 470pm tax credits, and 120 working tax credits (hope this is true, done it a few times now and comes back same) I phoned up Inland Revenue and they referred me to the online calculator, they wouldn't give me an estimate. I can't work anymore hours than I do, as I have to take time off in the school holidays as I have no childcare help or family. I work term time only.

getting a 60k mortgage is more than half the monthly costs of renting. Plus this deposit I don't want to fritter away, as its to set us up somewhere permanent, it's an asset for me and my children.

i am unable to put the benefits down as 'income' figures in my mortgage application until I'm actually receiving them (and that's if I definitely am entitled to them)

when I rang IR they said even though separated I could actually claim them now, but if a few months down line and still living together, then I could be in trouble for a false declaration, but then I can't predict how long it will take for the house to sell.

the broker said it might be worth me renting to show like a track record of receiving these extra incomes. But When I look at renting, it's extortionate, like 600+ And hardly anything round where I live . Not even seen one that is furnished, which would soften the blow of hassle. I am trying now to see if I would be entitled to housing benefit as that would also soften the blow.... And would help me with rental costs, but got feeling computer says no, because they will see I have 40k, but this is my deposit money that I want to move into my own house. I don't want to be penalised for it, or will it not be taken into account. I don't think for tax credits or working tax credits they ask about savings.

Tried ringin my local housing benefit department today, waste of time, no answer, queuing etc, and same with my local CAB, their phone line was permanently engaged.

Tearing hair out with it. I can't seem to find a solution at all...and I so want to do with minimum disruption to the kids.

At work I have free legal advice for half an hour and all they kept doing was referring me to 'turn to us', which again all online calculators, I got to a certain point where I could no longer go and it kept crashing.

Any advice would be so appreciated xxxx

[IceMaiden73]

What is the maximum the mortgage company says you can borrow?

[rememberthetime]

I am going through the exact same thing. Just try breaking things down into manageable steps.

Your first step is to get an appointment with CAB to run through your benefits. Apply for those you are entitled to and get that ball rolling.

Are you getting maintenance? Get that written down legally as it could be income if it is court ordered.

Continue with the sale of the house.

Once you have a clearer idea of your benefits try your mortgage adviser again.

You may need to reduce your expectations re your home. Try a 1 bed apartment to start then aim to sell that in a year or two and buy bigger. Even if it means sharing a room with your kids.

Consider a house share scheme with the council or Help to Buy.

How about buying a smaller property and renting it out to someone else. You will then get an income from it to boost yours and you have an asset for your future. You could sell it once you are able to work more and buy a place for your self.

Benefits will be affected by being a landlord - but the profit may outweigh that.

You do have options - but you need to tackle one thing at a time.

[MrsBertBibby]

Have you actually sought advice from a family lawyer? Please do so before exchanging on the sale, you may not need to sell at all, and you may be able to claim more than you are from the equity, based on your need.

[Tanito279]

Your savings / mortgage deposit will be used when housing benefit is calculated. You need to provide proof of everything you have in the bank or investments. At least, I e lived in 2 counties and both wanted to know everything. However there is no harm in doing an online application and seeing what they say.

[VodkaValiumLattePlease]

Why do you think your local council should pay your rent if you have 40K in your bank? The mind boggles

[RueDeDay]

I was in a similar position a year ago. Applied for tax credits as I was living financially totally separately from my now ex-H. They weren't taken into account for the mortgage, but I was then able to 'show' that most of my expenses were 'optional' and paid for by the tax credits and only list the 'necessary' costs under my main salary. All my car expenses, child hobbies, TV license etc... All 'optional'! I now have the mortgage and am in my new house.

[Tullippa]

Many thanks for the responses.

We have to sell as can't afford to keep the mortgage singularly. I am not in receipt of any benefits yet, because although we are separated, everything is still joint like our bank accounts etc, therefore I don't need to claim yet, my husband is a higher earner than me. I wish I could claim as I could then start buying the essentials I need, all possessions are also being split 50/50. Although I believe I can claim tax credits, I worry if house is still on market months down the line, and we are considered living together, they will ask for money back, and I don't want to be in any kind of trouble. there is no animosity between my husband and I, the marriage has just broken down and unfixable. everything we are doing is spliting 50/50, I know I am a low earner, but I don't want to share more in my favour. maintenance we have agreed to do with ourselves when we are both properly separated, living in different homes.

PS. Vodka your sarcasm isn't helpful, when im separating and only asking for advice! I want to inject my house sale profit into a property for me and my kids. I have paid into and earned this from my house for many years, So if it means I can freeze it and rent for a while with help from the government , then I will damned well do so. I am only checking if anyone knows if I am allowed to, or in similar position...... I never said anything about 'expecting' housing benefit.The 'mind boggles' when someone is plain catty!!!

[WatchingFromTheWings]

Tax credits will definitely take the 40k into consideration. You're allowed savings of up to £16k, anything more and you won't be able to claim.

[IzzyIsBusy]

To freeze it and get hb you would be commiting fraud.
They will ask you what assets and savings you have and if you say none then you are lying.
HB is not there for people to use to save money or to secure them a mortgaged property.
It is there to ensure those on a very low or none exsistant income can keep a roof over their heads.

I understand you are trying to do the best for your family but defrauding the benefit system is not the way to go.

Can you raise anymore money to make the deposit bigger or find a cheaper property?

[MsMims]

There is no provision to 'freeze' savings. That amount would mean you aren't entitled to housing benefit (and rightly so).

How much is rent in your area? In your position I would either buy a cheaper property, or rent somewhere while accumulating more of a deposit.

[ruddynorah]

What is your husband doing to house himself? What's he doing to make sure his children are housed? If you're on a lower income he should be giving you more than a 50/50 split so that you can get set up.

[BombadierFritz]

can you get a mortgage guarantor from eg parents? I sympathise over the savings barrier to benefits - it becomes part of the benefits trap that you end up on a lifetime of housing benefits and cost the taxpayer far more! there are sometimes exemptions for lump sum savings like this if you are planning on using it as a deposit for a new house - you would need to read the rules carefully and perhaps get advice from cab
eg
www.manchester.gov.uk/info/500180/housing_benefit/4265/how_savings_investments_and_property_affect_your_housing_benefit_and_council_tax_support/4

[BombadierFritz]

I agree as well. you are going to have to be tougher about the financial settlement if you are going to be the main carer for the kids. you need a home.

[Parsley1234]

Do you have anyone you trust like parent relative great friend etc ? Get them to get a buy to let mortgage on the house and you rent it with your deposit protected legally ? Shd be an easy enough transaction buy to let is 25% deposit minimum. You are right to want to protect your deposit for your children - there is always another way keep pushing for it you will get there.i have a great mortgage broker if you need help pm me xx

[cantshakeitoff]

The benefit system is not there for people with a large chunk of savings.

Are there no holiday clubs in your area? Childminders? If I was you I would look into holiday care options and stater working full time.

If you work full time you'd probably get five weeks holiday a year, their dad will presumably also get five weeks a year. That leaves only a few weeks you actually have to find childcare for.

Providing a roof ver your children's head is IMO more important than getting all school holidays off with them.

[Misselthwaite]

You're married one of the benefits of this is the protection it offers in the event of divorce. By splitting everything 50:50 you're really shooting yourself in the foot. You don't earn much presumably because you've had time out from work due to the children. You can't increase earnings because you need to be home for the kids. Both of these things mean you should get more than 50:50. Speak to a solicitor asap.

[MrsBertBibby]

You should be getting all the equity or staying in the home. Your H can get his share when the kids are grown. You don't have to get his name off the mortgage.

If you don't want to do that, fair enough, but you can't then complain that you can't afford a home, and that your equity will go on rent.

[Helloitsmeeeee]

You're right you won't be entitled to housing benefit with savings of that amount. Tax credits don't ask about savings.

I am in a similar position and can't get a mortgage. I was told benefit income does not count although I had to declare it in the assessment.

[pullingmyhairout1]

I am a mortgage broker who has recently gone through a divorce in your situation.

Firstly, yes you can claim as a sole claim if you have separated as long as you separate finances and you don't eat together that kind of thing. Make sure you keep the legal paperwork for divorce, etc as you will need it when you get investigated by concentrix.

Once you have your assessment and you start receiving tax credits, etc you can use that as income for mortgage purposes. This will bring your affordability up. You will need to declare your dependents because otherwise this is mortgage fraud and you definitely won't want the stress of that.

Housing benefit will never be taken into account for mortgage applications and I think if you have a large lump sum you won't be eligible anyway.

[expatinscotland]

'So if it means I can freeze it and rent for a while with help from the government , then I will damned well do so. I am only checking if anyone knows if I am allowed to, or in similar position...... I never said anything about 'expecting' housing benefit.The 'mind boggles' when someone is plain catty!!!'

That's not possible without committing fraud.

I think I'd push for a more generous divorce settlement and maintenance. He needs to be doing more to provide a home for his children and childcare or money for childcare so you can work more.

Sadly, when you're not in a couple, life has to take on some compromises it wouldn't otherwise.

[BombadierFritz]

it is sometimes possible, as I have linked to above

[BombadierFritz]

I agree entirely though expat, this is exactly why she needs to push for more than 50:50

[ThisIsStartingToBoreMe]

Another option would be to look at shared ownership. You could invest your lump sum of £40k and then rent the rest. Your lump sum would be safe and you could buy larger shares as and when things get better.

Plus, if you were ever unemployed, your investment in the house wouldn't be counted AND you'd receive housing benefit to pay your rent.

Take a look at shared ownership.

[ThisIsStartingToBoreMe]

Having said that - I don't think you should settle for 50/50. You should ask for equality. What that means is that you are both in the same position GOING FORWARD. So, he takes his £40k and puts it down as a deposit and with his large salary gets a mortgage. But you take your £40k and have to spend it on rent, then that's not equal - does that make sense.

Please see a solicitor.

[AndNowItsSeven]

Natwest and Halifax both accept child tax credits as income,once you are receiving them.