Mortgage Requirements

• When a person attempts to take out a mortgage to buy a home, the lender will typically look at a variety of information about him in an effort to determine the likelihood that he will pay back a loan on time. If he has a large amount of income and a high credit rating, he will likely be issued a loan at a low rate. However, a person on benefits will likely be considered less able to pay back the loan.
  
  

Income

• A large part of a person's qualifications for a mortgage has to do with her income. When a person is living on government benefits, his income is typically not very large. For creditors, this may create worries that the person will not have sufficient income to make the mortgage payments she agrees to. The lender may therefore only agree to lend her the loan at a high rate of interest to offset the lender's risk.
  
  

Types of Benefits

• Claiming benefits will not automatically disqualify a person from getting a home loan. However, some benefits are less attractive to lenders than others. For example, a person receiving unemployment benefits receives only a small amount of money for a short period of time. However, a person on disability may receive a relatively large check on a consistent basis, making him relatively attractive to lenders, who value a steady income.
  
  

Considerations

• Whether a person can qualify for a mortgage while claiming benefits will not just just depend on his income, but on his other assets, the size of the mortgage, and his credit rating. If a person has a high credit rating and a large amount of savings, creditors may be willing to overlook the fact that he has a relatively small income. And, if the person has other income in addition to the benefits, he may well be attractive to lenders.