Can I Get a Mortgage on Benefits?
Homeowners who receive public benefits, retirement benefits and other types of benefits can qualify for a mortgage loan. It depends upon the types of benefits received, how long the homeowner has received them and if they're likely to continue for at least three years. Mortgage lenders cannot discriminate against the borrower simply because they are disabled or because of their age. Federal law prohibits this type of discrimination. There is even a certain type of mortgage only available to people who are eligible to receive Social Security benefits.
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Unemployment Benefits
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Homeowners who receive unemployment benefits may still qualify for a mortgage if they meet certain guidelines. If the homeowner was simply laid off from a job and is receiving unemployment benefits then she may not qualify for a mortgage. If the homeowner regularly receives unemployment benefits because of the type of employment normally held, then he may qualify for a mortgage. Homeowners who work seasonal jobs, or other jobs which routinely lay off people during a specific time of year, may use the unemployment benefits to qualify if they have received them for at least two years.
Retirement Benefits
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Homeowners who receive retirement benefits such as Social Security, pensions or income from another structured retirement accounts may use this income to qualify for a mortgage. The mortgage lender requires the borrower to have received this income on a steady basis and have a likelihood of receiving it for the next three years. The mortgage company reviews the awards letter provided by the Social Security administration or pension manager to determine eligibility and the likelihood the income will continue.
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Disability Benefits
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Some homeowners receive a partial or full disability payments on a regular basis. These could come as a Social Security disability claim, worker's compensation claim or a private disability insurance benefit. Most disability benefits are not taxable by the IRS like other types of income and benefits. Mortgage companies increase the amount of disability received by 125 percent to take into account their nontaxable status. The mortgage company usually requires a copy of the awards letter and a statement from the physician verifying the disability is not likely to end in the next three years.
Reverse Mortgages
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The Federal Housing Administration provides a reverse mortgage program that is only available to homeowners who qualify for Social Security benefits. The homeowner must be 62 years or older to qualify for this program. A reverse mortgage does not require the homeowner make any payments for the life of the loan, in fact the homeowner may actually receive payments from the mortgage on a regular basis for life. The homeowner retains ownership of the home and can will it to her heirs when she dies.
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