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Mortgages for disabled people

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 13, 2023

Mortgages for disabled people

As a mortgage broker, we have a few mortgage providers lending to people with a disability living allowance and disability benefits. Contact us today to speak with a mortgage adviser, we can introduce you to mortgage lenders who will get a mortgage to suit you.

A provider’s mortgage affordability is the main thing that will stop them from lending to you. This is typically your income stability and your income.

There are different eligibility requirements for lenders so don’t lose heart if you have been denied a mortgage. As mortgage brokers we can provide bespoke mortgage advice because of the collaboration with whole-of-market specialists.

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What does my disability benefit have to do with my mortgage application?

When you apply for a mortgage, disability benefits refer to income that you get for short-term absence (i.e. If you are permanently disabled, long-term benefits may be available if a return-to-work date has been established.

A significant consideration for mortgage providers is the fact that many people are happy to accept government benefits income. However, many don’t realise that these benefits can supplement a low income. There are other low-income mortgages. Read more in our guide.

The “continuance factor” is another important concern, regardless if you have a long-term or short-term disability. This means “what’s the likelihood that this income will continue?” and “what happens to it if it drops?”

Contact us today for independent financial advice, we can help with your mortgage application and find a mortgage lender to work with you.


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Can I get a mortgage for long-term disability?

Lenders will generally accept long-term disability income if you can prove that the payments will continue in the future.

You will need to provide a benefits statement detailing the amount and frequency of your payments, as well as the date you expect the payout to end.

Lenders will ask about your history of bad credit and how much you have saved. You will need to prove that your income is sufficient for your monthly repayments.

Some income sources may not be accepted by mortgage lenders, but you might be eligible for a loan if you have Social Security Disability Benefits or long-term disability payments.

You may be required to undergo regular re-evaluations as part of long-term disability insurance policies. However, this should not affect your ability to apply for a mortgage.

Can I get a disability mortgage if I am on short-term disability?

It is slightly more difficult to determine mortgage eligibility when you have a short-term disability income benefit that will increase your affordability.

It’s possible that the income you are receiving will not be extended or that your return date to work is unknown. Lenders are reluctant to approve a claim based on short-term disability income benefits.

Providers need to consider whether they have the income to approve a mortgage or how much they will lend in the case of short-term disability claims.

If you have a pre-injury income, the lender might be able to approve your loan application on that amount – provided they know when you will be returning to work.

The employer should also send a letter stating when you expect to return to work. A letter from the doctor who provided the care may be requested.

Simply put, the more documentation that you have supporting your expected return to work date will increase your chances of being in a position to use your original income even if you are not actually back at work.

Problems can arise if you are unable to provide a return date or if your pre-injury income is not sufficient to pay your mortgage.

Contact us today if you need further assistance from a mortgage specialist with disabilities.


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Your legal rights when applying for a mortgage if disabled

Banks and other lenders won’t reject your mortgage application if you are able to afford it.

As with all other applications, they will evaluate your application on the basis of your affordability and financial situation.

Lenders cannot insist on you paying a higher deposit or making larger monthly payments than customers who are not disabled.

Applications might take longer, be processed at higher rates or be rejected due to certain illnesses. This is why it is so important to get help when applying.

Who is the beneficiary of disability legislation?

Even if you aren’t a disabled person, anti-discrimination laws might still apply to you.

A disability, according to the Equality Act is any physical or mental condition that has a significant and lasting impact on your ability to do daily activities.

This applies to anyone with a medical condition like cancer, HIV, MS, or a mental illness such as depression.

The Equality Act does not cover your illness.

You should seek expert advice if you are looking to move up the property ladder, but you are concerned about long-term health issues.

A mortgage advisor can help you assess your financial situation and look into the various financial products available to you. They can assist you in completing the application if they have a loan that you might be eligible for.

Your advisor might suggest ways to improve your financial situation to increase your appeal to lenders.


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If you are on disability or sickness benefits, it is possible to get a mortgage

Lenders are most interested in your ability and willingness to repay the mortgage. Lenders will need to see proof of income, to understand your expenses and if there are any outstanding debts. Lenders will also need proof that you can afford to make your monthly payments if interest rates go up.

A mortgage can be obtained even if your income is primarily or partially made up of benefits. However, it can make it more difficult.

When completing their affordability checks, some lenders are more inclined to accept income as benefits than others. This includes payments for people with disabilities.

It can be difficult if you are only receiving disability-related payments for the short-term – or if your future plans include returning to work.

Lenders will not approve mortgage applications based on short-term financial benefits. Their approach will be influenced by your specific situation and requirements.

A specialist mortgage broker will help you find a lender willing to lend money to someone like you.


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Disability assistance with mortgage interest payments

You might be eligible to receive help with mortgage interest payments if you have been receiving an eligible benefit, including income-related Employment and Support Allocation, Income Support and Universal Credit for at least 39 weeks (approximately nine months).

This is known as Support for Mortgage Interest (SMI). SMI is a loan you will have to repay with interest after you sell or transfer your home.

Accepting disability benefits by mortgage lenders

Many independent and high-street mortgage providers are willing to accept Personal Independence Payment (PIP) or Disability Living Allowances (DLA) as income sources for affordability.

Natwest Mortgage Disability Benefits

Many customers are curious about Natwest’s policy on mortgage applications from disabled applicants.

Natwest claims that they are happy to “consider 100% of Disability Living Allowance/Personal Independence Payment.”

They are also developing accessibility options that will improve their services and assist customers in their daily banking.

There are many lenders that cater to disabled borrowers, whether they’re specialists or high-street. However, it can be difficult to find the right provider for you.

You may miss out on a better deal elsewhere if you go direct to a lender (even a well-respected one like Natwest). But if your application is submitted through a broker who covers the whole market, this won’t be a problem.

Ask an expert about mortgages for disabled people

Do not hesitate to contact us if you have a disability or are looking for a mortgage.

We work with a whole-of-market broker who can offer impartial advice and help you find the best lender for your particular situation.

You can contact us or send us an email today. We only work with accredited 5* advisors. There is no charge for our services and you are under no obligation.


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