Can you get a mortgage on benefits?

I live in a housing association home that is worth around £100,000. I have been offered the house at £61,000 as the housing association said is worth £70,000 and have been very generous with that valuation.

My local bank said I don't need a deposit to buy the house because of the difference in my mortgage and actual house value.

So all I need is an income but I jusys can't get a secure job no matter how hard I try. I'm currently training to be a social worker and im almost qualified so hopefully things will change in a few months.

My total income on benefits is £7, 000 a year and obviously that isn't taxed. I don't get student finance just income support, tax credits and child benefit. I also get housing benefit but that isn't counted.

Would I be able to get a very small mortgage on that?

Apparently like the housing bill is being changed which will mean I only have to pay roughly £43,000 for my house as I would get a 36% discount.

Well I decided to go to the bank and ask after writing this thread. And basically benefits are seen as even more secure than job income. And I would be able to borrow 4 times my income.That's obviously not enough to buy a house but I'm not too hard off :-)

I'm not surprised that benefits are counted (since they are income) but I'm surprised that they are being counted if you are the sole applicant. Seems pretty reckless by the bank.

Have you factored in how much your weekly/monthly budget is and then factored in actually paying a mortgage. If you're a homeowner, would you still be eligible for council tax exemption?

Usually you are not allowed to sell a house you bought using the right to buy from a council/local housing for a period of 5 years (if you do, you lose the discount they provided).

Yes I've factored them all in. I've made sure I have enough. I think the banks like to lend to the right to buy. It's a very secure mortgage for them.

That's good if it all works out for you. I'll admit I'm a little surprised. Presumably this discussion with the bank was just the initial informal chat and not the full mortgage application? I know that lending requirements have gotten more stringent these days.

Assuming it's a 61k mortgage for 25 years, the repayments would still be at least £300 a month (£3600 for the year) so basically half of your benefits for the entire year will go on your mortgage? But you're still able to budget for the cost of everything including your child? How young is your child (or children)? Will they not get more expensive with age?

Will you definitely get through their credit checks? Whether because of bad credit history or even no credit history (some banks can't lend unless it is positive).

What happens if the interest rates go up? Obviously at a historic low now but lots of talk about rates going up in the next year or so. They won't stay so low for the next 25 years. Can you afford your mortgage repayments if interest rates increase by say 2%? Or even 4%?

And I assume since you're not putting down any deposit that most of the better rates won't even be available to you since typically you need to put down a 25% deposit for those. Or does the difference in valuation to the market value and what price you are buying count in your favour?

OP - as someone on benefits, you're entitled to help with the interest on your mortgage. I don't know the details of this though.

I'm not allowed borrow 61k only 4 times my income so the repayments would be around £50 a week. Interest is paid by the government when you're on benefits.
My parents are lending me the extra

Hmmm, I am very surprised at this given the Tory govt view on benefits and the fact they are starting to reduce benefits... the banks would see this as a potential risk...and, as your child grows older, costs increase!! It is one thing to work out your finances on paper however, finances in reality are very different e.g. you never know what other expenses you might incur .... and what when the interest starts to rise, locked-in rates are already becoming expensive. Nice idea you have but methinks silly in reality.

Yes that's correct. The interest is paid on a mortgage up to 200k.

I thought that was only the case of if you had a mortgage and then had to go on benefits... not getting a mortgage whilst already on them.

Frankly I'd be shocked and a little disappointed if you were able to get a house while on JSA type benefits, clearly you would then be unable to easily move to find work.

No it's included if you were on benefits at the time of taking out the mortgage. A lot of people don't agree with it I know.

I thought that was only the case of if you had a mortgage and then had to go on benefits... not getting a mortgage whilst already on them.

Frankly I'd be shocked and a little disappointed if you were able to get a house while on JSA type benefits, clearly you would then be unable to easily move to find work.

Why should someone be forced to move away from their friends and family just for a minimum wage job? We all have lives and people we love, we shouldn't be forced to leave that behind for a job that might not even last that long.

Why shouldnt someone be forced to move away from their friends and family in order to be able to support themselves? Why should I have to pay for someone to choose not to work just because they won't move for a job.