Can You Secure a Mortgage While Receiving Centrelink Benefits?
The Benefits That Count
There are three Centrelink benefits that may count towards your income for a home loan. However, there are some things you need to know.
• Child Support and Maintenance: A limited number of lenders accept income from child maintenance and support payments. You’ll need to provide documents from the Child Support Agency (CSA). You will also need to confirm if the payments are court ordered. Lenders will often want to see proof of payments over a six month period. You will need to provide some documents with your application, including bank statements showing payments and a solicitor’s letter. You must also provide copies of any court orders. Bring a letter from the CSA that proves your claims.
• Family Tax Benefits: Several lenders accept Family Tax Benefits (FTB) Part A and B as income. Some even consider The Large Family Supplement benefit. However, there are some things you need to consider if you want a lender to consider FTB as income.
Most lenders want a copy of your most recent Centrelink statement. You can access your statement on the Department of Human Services website. Make sure you print out every page, including blank ones.
Several FTB benefits won’t be considered income. These include medical allowances and parenting payments because these benefits have specific purposes. Rental assistance is also not taken into consideration.
There are only a number of lenders who accept FTB once your children are over 11.
• Veteran’s and Widow’s Pensions: A lender may accept a veteran’s or widow’s pension if you can prove you pay your current home loan. Most will also want proof of your future income.
Lenders will usually only accept ongoing and permanent pensions. Speak to the lender to find out whether you meet the requirements.
If you do, the lender will need proof of your pension payments. You will need to provide a statement from the Department of Veterans’ Affairs. The document needs to include your personal details and information about your pension payments. You should also provide a bank statement.
The Benefits That Do Not Count
If you are receiving any other type of Centrelink benefit, it may be harder for this income to be considered when applying for a home loan. In the case of some lenders, this might include the Disability Support Pension and Foster Care Allowance. Other payments that are not typically considered are Age and Overseas pensions and Carers Allowance. However, uno partners with one particular lender who can take this type of income into account – so contact us to discuss your situation further.
How Much Can I Borrow?
How much you can borrow depends on two factors. The lender’s policies play a part, but the most important is your income amount. If you want to get an idea of how much you can loan, check your statement and calculate your fortnightly income. Multiply that income by 26 to find your annual tax-free income figure.
You can also check payslips or statements to calculate how much tax you pay. If you are applying for a joint loan, calculate the income of all parties.
The best way to get a rough estimate of how much you can borrow is to use a mortgage calculator.
However, keep in mind different lenders have different ways of calculating how much you can borrow.
Do I Need a Job?
As a general rule, you or your partner will need a job. Most lenders do not accept Centrelink benefits alone as income.
Proof of income from a source other than Centrelink reduces the risk involved for the lender, improving your chances of having your application approved. Again though, there is one particular lender that uno works with that can be flexible when it comes to Centrelink benefits – so contact us to discuss your situation with an adviser.
What Should I Do Now?
Talk to an adviser if you think you can use your Centrelink benefits as income. They can give experienced advice regarding how much of your benefit will be considered as income for a home loan.