Any hope of getting a mortgage on Universal Credit?

[HouseNoMore]

After scrimping and saving for years, living with family and working myself into the ground working full time and being a single mum to 3 very young kids, just as I'm finally putting an offer on my first house I get hit by the UC migration letter

My lender has said that they don't accept UC, and I'm struggling to find another who will lend anywhere close to the same amount my last AIP was

Is there any hope? The irony that if I can't get a house I'll end up renting which will come out of UC's pocket anyway

Why do you think you should be able to pay off a mortgage partially funded by benefits?

You need a conversation with a mortgage broker. There may be a lender who will take into consideration UC, or part of it, but there is always the issue of how are you going to make up the shortfall in income when your kids are grown up. They will ask and if you haven't got a reply, that's more likely to hinder you.

How do you have the deposit and still get UC?
Do you currently get housing benefit and tax credits?

Well if you've saved over £16,000 for your deposit you won't get UC anyyway.

How much is your deposit?

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Because she's had a UC migration letter, like she said in the OP. Which means she's on tax credits, not UC. The rules are different.

I suspect you won't be entitled to UC if you have significant savings so UC won't pay towards your rent. How much have you saved? £16k makes you not entitled to UC.

A lot of TC claimants are going to get a shock now they realise they can't have big savings like they used to be able to.

No

She’ll be able to keep her savings for 1 year once she moves to UC.

Unfortunately universal credit will help pay your rent but won't help pay towards a mortgage. It has elements so you'll get so much for being single and over 25, so much for having children (they only pay for the first 2 unless they are born before 2017) and an element for rent but not mortgage.

They allow savings but cancel your claim if it's above £16,000 and deduct money off your total universal credit if you have 6,000-16,000.

There's a Facebook page called universal credit survival that helped a lot when I claimed it.

Do you mean are there mortgage lenders who will take UC into account as part of your income? Try Natwest. But your best bet will be to speak to a mortgage broker as they'll know which ones do and don't.

@StarlightLime

Why do you think you should be able to pay off a mortgage partially funded by benefits?

Well either OP gets a mortgage paid or a landlord does. Would you prefer taxpayers money to pay off a landlords mortgage? Surely it makes sense to pay a mortgage at probably less than rent would be & then OP won't need pension credits later in life?

The welfare state isn't in the business of providing people with assets.

It certainly is - tax relief on pension contributions for example.

Oh, but you meant just for poor people!

UC won’t pay towards a mortgage anyway. OP will be eligible to UC to help with her children and childcare costs.

I meant for people claiming benefits, I thought that was obvious.

Most LL mortgages are Interest only so most LL won't be getting their mortgag paid off. This is really common knowledge yet I'm always reading comments on MN about LL getting their mortgages paid by tenants. It's just not true.

They used to @StarlightLime when we first needed to claim benefits we were entitled to SMI which was a lot more than our actual interest rate so it paid off a large chunk of capital too. I believe it's now a loan repayable upon sale (or death) but still at a preferable rate.

Since then we've cleared the mortgage from a mix of disability and tax credits. As the government doesn't yet police how people spend their benefits, we were totally entitled to do so.

Surely better to pay a mortgage than have the government fork out continually for housing benefit or is it ok for a landlord rather than a claimant to gain an asset through welfare?

Even if the LL has an interest only mortgage the property is still increasing in value. They are still gaining.

Yes exactly - people for years have been able to have as much in savings as they wish and still claim tax credits as only interest over £300 a year affected things. On UC you cannot claim if you have savings over 16k.

But with a mortgage she gets a significantly higher work allowance than those claiming help with rent.

@StarlightLime

The welfare state isn't in the business of providing people with assets.

Well that's true - unless you're Michelle Mone or that pub landlord mate of Matt Hancock 🤔

UC doesn’t pay towards mortgages like it does with rent - in most cases it doesn’t provide any housing costs if you own your home.