Can You Get Universal Credit if You Own a House?
Estimated reading time 4 minutes
Owning a house can be hard work, and it’s made even harder if you find yourself in financial difficulty and struggling to pay your mortgage. Thankfully, in the UK, the benefits system exists to help those in unfortunate circumstances get by a little easier. So, does it help homeowners? In short, yes. You can get Universal Credit if you own a house. It doesn’t help with mortgage payments as such, as we’ll explain later on, and it may mean you are unable to remortgage if still on the benefit in the future.
In this blog, we’ll look a little deeper and also explain how you may be able to stop repossession if you are unable to keep up the mortgage payments on your home.
What is Universal Credit?
Universal Credit is a benefit provided to legal UK residents who are on low incomes or unemployed. It’s paid monthly to help meet living costs and varies in amount depending on age, whether you live alone or with a partner, whether you have children, and whether you have health conditions, among other factors.
To be eligible, you’ll need to be a UK resident, aged over 18, under the state pension age and have less than £16,000 in cash, savings or investments.
How much Universal Credit will I get?
The amount of Universal Credit an individual can receive varies depending on the criteria they meet. At present, the following amounts are paid monthly to eligible claimants:
- Single and under 25: £316.98
- Single and over 25: £400.14
- Living with partner and both under 25: £497.55 (total)
- Living with partner and either over 25: £628.10 (total)
Extra money may also be provided in certain circumstances. If you have children, and they live with you, you’ll receive extra amounts until the 31st August after their 16th birthday or 19th birthday if they are in eligible education or training. You’ll only receive this money for the first two children, unless any additional children were born before 6th April 2017 or you were already claiming for three or more children before this date.
- For your firstborn child born before 6th April 2017: £339
- For your firstborn child born on or after 6th April 2017: £292.81
- For second child or any other eligible children: £292.81 (per child)
There are also additional payments if any children in the household are disabled, you act as a carer, or you have a disability or health condition.
Can you get Universal Credit if you have a mortgage?
You can receive Universal Credit if you have a mortgage, but it is not specifically categorised as “mortgage help.” It won’t be issued in accordance with how much you owe on your mortgage, and therefore could make it easier for you to fall behind on repayments. Instead, homeowners on UC can request an SMI loan. The Support for Mortgage Interest loan is a loan that specifically pays off the interest payments on your mortgage, with it repaid once you sell or transfer the ownership of the home.
An SMI loan cannot be used to cover mortgage arrears, and the loan will only be issued after three months of receiving Universal Credit.
Can I apply for a new mortgage when on Universal Credit?
You could apply for a mortgage if, for example, you want to remortgage to try and reorganise your finances and stave off repossession. However, the chances of approval can be slim. A lender will consider your Universal Credit and classify it as income. With the benefit being relatively low, you may fail to meet the lender's eligibility criteria. Even if you do meet these criteria, you may only be offered a limited amount, with high interest rates, unless you have a substantial deposit behind you. If you are worried about repossession, we can help with our fast route to sale. Our guide to Form N244 also helps to explain how repossession can be delayed in some cases.
Universal Credit provides an essential lifeline for those who need assistance, and the SMI loan ensures homeowners can navigate the harsh interest rates that apply to many mortgages. Unfortunately, for some people, substantial arrears mean that even with assistance, repossession may remain a possibility. That’s why Bettermove is here to help. We ensure you sell your house fast, avoiding delays and stress, and stopping repossession from harming your future opportunities of homeownership. We buy your house for cash or present it to an exclusive network of cash house buyers. Either way, your home sells within thirty days without you spending a penny on the legal fees. Contact us today to find out more.
