A warning has been issued to Brits on Universal Credit and State Pension about payment bans being imposed by some banks.
Half of all lenders are refusing to give a mortgage to people on benefits because they are not being allowed to use money from their Universal Credit of State Pension pots.
This means that they have a very limited choice which can make it much harder to get on the housing ladder.
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The problem is that in order to get a mortgage, lenders look at all sources of income to see if they can afford the loan, reports the MEN.
That includes primarily the salary, but also includes things like pension payments and benefits.
Many lenders only factor in some types of income and not others, which can be a huge shock.
Not all lenders agree on what counts as proper income and what doesn’t, which causes issues for people.
David Hollingworth, from L&C Mortgages, said: "I think people can be under the misapprehension that lenders will take their whole income into account.
"They total everything up and expect their lender will accept everything.
"But each type of income can be treated differently, and it can be treated differently by each lender.
With Universal Credit, for example, some may only take a proportion into account and some may not allow it at all."
If you get a company or private pension, for example, all 71 mortgage lenders doing standard home loans class this as income.
That is according to mortgage broker software Criteria Brain, which lists what lenders do and don't look for.
If you get a state pension, three lenders don't allow it - but 68 still do.
However, things are a bit different if you receive Pension Credit - a benefit that tops IP the income of retirees to help them have a decent standard of living.
30 out of 71 lenders do not consider this as income.
For example, Santander, NatWest and Barclays allow it - while Kent Reliance and Accord do not.
11 lenders don't allow SIPPs, or self-invested personal pensions, while 22 turn up their noses at drawdown - cash taken out of a pension.
If you have a pension annuity, you get a guaranteed stream of money until you pass away.
But in spite of that certainty that money will continue to flow, 12 out of 71 lenders do not take money from annuities.
Many older borrowers have interest-only mortgages, where they are only paying off the interest.
They need to repay the loan in full at the end of their mortgage term. Some people do this from selling the property, while others want to use pension cash.
But be careful if you do, as only 16 out of 71 lenders will allow this.
The situation for benefits is much worse, says the Mirror.
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If you get Universal Credit, only 45 per cent of lenders accept this - 32 of 71 lenders.
For example, big lenders NatWest, HSBC and Halifax allow it, but Accord, Metro Bank and Virgin Money don't.
For Child Benefit claimants, 43 lenders oblige - that's 60 per cent.
For Carers Allowance, it's 31 out of 71 lenders, and for Child Tax Credits, 44 out of 71 lenders - 71 per cent.
Mortgage brokers can help find the best deal for you even if you do not fall into any of these categories.
Borrowers should also be aware that these tough rules apply to getting a mortgage with a new lender.
If borrower A gets a mortgage and is not on benefits, but gets benefits by the time they remortgage, they are fine if they do that with their existing lender and don't move away.
That is because - most of the time - they won't have to go through affordability checks again if they stay put.
But if they want to swap to another lender they will have to go through the process again - and might find they struggle.
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