MSE News: Women face missing out on mortgages over child support rules

Former_MSE_Helen · 4 November 2013 at 10:17AM

"Lenders' rules on child support mean many women risk missing out on getting mortgages..."

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Women face missing out on mortgages over child support rules

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electric_comperella · 4 November 2013 at 7:03PM

I definitely think this is a cause which Martin should begin a campaign regards, similar to the one he mounted against PPI and Lloyds etc.

This problem affects not only mothers but also fathers with care and has a knock on effect on the children in our society - surely a stable home life for our children should be one of paramount concern especially during relationship breakdowns, I think as a child when losing a parent from your life the last thing you'd also need is to have to move schools and home etc.

chirpchirp · 11 November 2013 at 2:16PM

I found this an issue. I had a court order and even with that I found mortgage companies refused to accept it. I was on a great deal but couldn't and haven't managed to get my ex's name off the mortgage despite owning the whole property. The court order was overturned after a year and a day but there is still another court order in place which isn't recognised.

When I wrote about it on here at the time I was informed by one kind poster that we don't have a right to have a mortgage! I totally agree with electric-comperella that we need to protect a child's right to a stable home life.

Thrugelmir · 11 November 2013 at 2:34PM

Maintenance income ceases when the child becomes an adult. So basing a 25 year mortgage on income which is time limited is a risky policy. Maybe circumstances where it is appropriate but one can envisage may where it isn't.

Conrad · 11 November 2013 at 3:03PM

Maintenance even under court order is statistically highly volatile and difficult to rely upon.

Lets remind ourselves of the key principle at the heart of FCA regulation;

'Lenders must place RESPONSIBLE LENDING AT THE CORE OF EVERYTHING THEY DO'.

Imagine a future MSE campaign as follows;

'Have you been mis-sold a mortgage based on maintenance income that you no longer receive as your partner stopped paying'?

Lenders treat all forms of income differently. For example overtime is often ignore completely or in part for the same reason its not as secure as basic salary.

lixandra · 11 November 2013 at 4:08PM

Thrugelmir wrote: »

Maintenance income ceases when the child becomes an adult.

Yes -- however when the child becomes an adult, it is no longer considered a dependent and affordability improves.

So if the lender reduces the amount of mortgage available to a woman (or man, if the case) because of her dependent children, then they should also consider the extra income associated with those children - child maintenance, child benefit, and child tax credits.

lixandra · 11 November 2013 at 4:11PM

PS. In my case Halifax were decent -- no court/CSA enforcement, I have an informal verbal agreement with ex - but Halifax took into account 60% of the child maintenance amount based on 3 recent bank statements showing consistency of payments.

Thrugelmir · 11 November 2013 at 7:37PM

lixandra wrote: »

Yes -- however when the child becomes an adult, it is no longer considered a dependent and affordability improves.

So if the lender reduces the amount of mortgage available to a woman (or man, if the case) because of her dependent children, then they should also consider the extra income associated with those children - child maintenance, child benefit, and child tax credits.

Much depends on the individual circumstances of each case. There no one size fits all solution. As Conrad has pointed out, lenders are responsible for taking a subjective view of affordability. Borrowers have always been over optimistic with regards to their ability to repay debt.

MSE News: Women face missing out on mortgages over child support rules

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