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

If you are earning 40k that’s around 30k more to live off than someone on benefits - where is it all going? You can’t afford to buy a place because you are spending your money on your lifestyle and not prioritising your house deposit / situation.

How do you still get UC/benefits when you have assets? You obviously have enough savings to put down a deposit on a house. And how much UC do you receive a month to cover the mortgage? I lost my job whilst heavily pregnant and I'm not eligible for UC because I have savings.

I could buy a house near me for £70k at that sort of price you don't need a big deposit, definitely not big enough to affect UC. It all depends on where you live

The tax credit regime was different. People seem to be missing that?

Benefits aren't included in mortgage assessments

Try nationwide. They accepted my tax credits , child maintenance etc a few years back and gave me a mortgage.

I was working part time as well.

I don’t think we should get in to an argument about not ‘prioritising your house deposit /situation’ otherwise plenty of people on benefits would become unstuck.

if you’re in London and paying rent then yes it’s going to be difficult to get on the housing ladder as prices are so high and now mortgages rates have increased. For many people their only realistic option is the bank of mum and dad. So for many it will seem odd that people who can’t afford to buy their own house are paying the mortgage for others.

I think it probably why some people will continue to vote conservative.

If you live in London in your mid 20s you will know that you can still rent a room for 600 in shared housing… which is what many mid 20 year olds do to get onto the housing ladder.

Lots of nonsense comments on here, asking with some sensible ones. You can get a mortgage whilst on benefits. When I became a single mum 11 years ago (with 2 primary aged kids) and was in receipt of tax credits, I was able to get a mortgage taking into account my tax credits, child benefit, my part time earnings and my maintenance payments all as an acceptable income source. Not all lenders will accept (the lender I was with at the time joint with my ex wouldn’t), mine was through the Nationwide who are a flexible lender. Your best bet is to speak to a mortgage broker. Or direct with Nationwide mortgage adviser, their lending policies continue to be more flexible than many of the other big players.
As an aside there is much negativity on here regarding those in receipt of benefits. I progressed myself professionally and now director of a very successful business (not in receipt of benefits for a long time now) from that low point of having to claim tax credits after my ex walked out.
Good luck and keep striving to better yourself.

There is a big difference between TC and UC and some people seem to be completely clueless.

If you want to buy a house you need to get a mortgage and move quickly before your savings mean you don't even get benefits BUT be absolutely sure you've done your calculations because you might not be able to afford to pay a mortgage. You won't be eligible for the housing part of UC if you own a house rather than rent.

Why not? I already had a mortgage then had to claim child tax credits. I
I also worked. I flipped a couple of grotty houses, am now mortgage free and no longer claim anything. Or should op and me instead take housing benefits from taxpayers forever?

We’ll they’re going to be paying someone towards the cost of a house, morally better to pay the person who needs the money and it might help her get herself financial stability than the landlord who doesn’t need any help.

Seems I've rattled some people! I was only asking about the mortgage application - my AIP was done with my tax credits (which they accepted as a form of income) but I've hit a roadblock with lenders not including UC as a form of income. Now my AIP has dropped from £140k to £80k-ish which is why I thought I'd ask.

I DO work full time. The tax credits were a top up and helped to pay some childcare costs. Living with a family member (very very grateful) allowed me to be able to save but it's not a permanent solution with 3 young children sharing a room with me. It's taken years and years and I am also fortunate to live in a cheaper part of the country where £16-20k IS a deposit. If I don't buy then I'll be renting, and instead of an £800 mortgage which I'll be paying for out of my income, UC would be paying an extra £550 a month for a 3 bedroom house, and that money would go straight into a landlord's pocket. Is that a better option?

Thanks so much to those who helped, will keep hunting around.

That depends on where you live, how much you have saved etc. OP has lived with family, worked hard and scrimped and saved to get a deposit together. Perhaps she lives in a cheap part of the country for housing. People on benefits will be subject to exactly the same income multiples as anyone else, so I imagine the majority of people on benefits will not be getting a mortgage anytime soon.

£16-20k IS a deposit

I live in an area of England where that would be a 10% deposit on a small house. I have over £16k in savings so I'm not eligible for any financial help despite having a baby and losing my job whilst heavily pregnant (contract not renewed after disclosing pregnancy).

I thought you couldn't get UC or any other benefits if you had over £16k in savings? I used to earn £2k a month after tax etc. I know there are some people who get this amount in benefits! Not saying OP does. I might have a look online to see if I'm eligible for anything.

OP is only getting UC with those savings due to transitional protection. After a year unless she uses those savings she won't be entitled. I wouldn't bother applying if you have savings like that and do a new claim that isn't from tax credits. Only allowed £6k before deductions start. It is also very rare to get to thousands on UC. You are in for a shock if you think it is generous.

What an ignorant thing to say. I earn over £40k and claim UC because I’m a single parent and childcare fees are extortionate. It’s not an either/or situation, and claiming UC or any other benefit that a person is legitimately entitled to doesn’t make them in any way inferior to anyone else.

Without UC I wouldn’t be able to work, but if I didn’t work and only claimed UC I wouldn’t be able to pay my bills, let alone feed my child.

Educate yourself.

Considering that many rentals won’t accept UC then I think you’d have a hard time finding a mortgage lender.

You could look into the help to buy scheme where you only need a 5% deposit and it’s typically aimed at people on lower incomes and helping them get onto the property ladder.

Do you know what the cut off for UC is in your area?

After tax I earn £1200 a month and get £400 UC top ups but if I earn more my UC will go down.

It may be worth you looking into getting a higher paid job or doing more hours and therefore not get any UC, to be able to get a mortgage.
You could then see if once you have a mortgage if you could mange it if you ever need to reduce your hours again/have less income.

No it just pays off other people's mortgages instead (landlords) in many cases if someone is entitled to the housing element! Not sure that's more aspirational than someone who probably recieves a small amount of top ups being able to get onto the property ladder and increase their prospects.

Uc won't be paying £550 as you earnings reduce the whole UC award including rent element.

As a single parent working full time with UC for 2 of the children, and rent costs, she’d very likely get the rent paid. Unless she’s a pretty high earner.

Try just working for longer and you’ll be able to buy a house. Very ignorant view from someone who’s in their 20s with presumably no kids yet. You never no what your future might hold yet, most people don’t ask to become a single parent. OP is doing her best to provide for her and her children’s futures in a situation she didn’t anticipate happening. You just haven’t managed to save enough yet because you are mid 20s.

I work with a specialist broker who might be able to help. Let me know if you would like details.

My point is that everyone on UC gets a rent element if you have rent to pay, but that is added to any other elements someone is also eligible for and the whole award is reduced by earnings, you can't separate the elements to say someone gets their full rent paid ?