Mortgages and Maternity Leave

InHerPrime

Hi, am new to MSE but have asked this question on a couple of other forums and not had much of an answer as yet. So here is the situation... my husband and I are looking to buy a house and I have pre-approval for a mortgage with HSBC that is based on my income only as he already has a property outside of the UK and runs his own relatively new company so his income is not as clear-cut as mine. We thought it would be simpler in these credit-crunched times to get a mortgage based on my income only. I got the initial mortgage approval about 8 months ago but we have struggled to find anything we really liked in this market and... our circumstances have changed as I'm now pregnant. We have yet to find a house we like. We're currently renting but would like to buy before the birth (am 2 months in) and ideally in the next month or so.

My concern is, am I obliged to tell the bank that I'm pregnant since I'm the sole earner for the purposes of the mortgage? They did ask me when they approved the mortgage whether we had children or had plans for any (this was 8 months ago) so it has made me think that this would be a factor in their decision to grant the mortgage. As it's only an agreement in principle, I assume this means they can withdraw the offer if I say I'm pregnant? I'm concerned that if they do, I won't be able to get another mortgage approved with another lender. Do banks just not lend to pregnant women as sole earners? I know I am at risk of reduced earnings in the next year. On the other hand, I do have six months paid maternity leave at work and we have other income anyway that we're not factoring in for the purposes of the mortgage so I'm not really the sole earner as it might seem from the application.

Does anyone know what the banks' take on maternity leave / female sole earners is? Would we be better off trying to get a joint-income mortgage, despite my OH's unusual income profile?

ginvzt

Ok, my opinion is that if they ask and you answer 'No', then it means you are giving wrong information and you shouldn't do that. If they don't ask, and you are sure you can afford mortgage when on maternity leave and with the chaildcare costs afterwards, the it is up to you if you wish to bring it up with the. I personally would only say that I am pregnant if they asked the direct question.

We are just about to get mortgage (waiting for a call with first direct), and yes, we do have plans (about to start IVF), but we are not intending to share this.

Cannon_Fodder

I don't think you can have it both ways.

You didn't count the other income, for "convenience".

Now that you might have income difficulties due to maternity, you would like the unspecified income to subsidise the situation - despite the lender having no opportunity to judge whether it is sufficient/appropriate.

If some change of Ts&Cs had occurred in the last 8 months, would the Lender be allowed to say that you don't need to be told of the change because of your 8-month-old pre-appoval..? Like massive ERCs, or higher SVR, or something else equally to your disadvantage..?

You are entitled to benefit from any newer, potentially better, deals 8 months on, and upto date Ts&Cs. They should be given the courtesy of honesty in return.

A fresh application with all the income on it, and the position regarding maternity, should be made, imo.

Senior_Paper_Monitor

and if the lender takes up a direct reference with the employer ????

InHerPrime

@CannonFodder: I asked specifically for information on what banking policies are on a change of circumstances i.e. how they treat the situation e.g. higher interest rate, withdrawal of mortgage, just a blanket policy of not lending to pregnant women etc. You're assuming I have 'income difficulties' and am planning to lie to the bank. Maybe you're being influenced by the large number of posters on here with debt problems or mortgages in arrears but that's not my situation. We can well afford the mortgage offered and could borrow a lot more if we took my husband's income into account but had assumed it was easier to borrow based on single incomes and didn't want to involve his non-UK finances. We have plenty of savings and no debts so affordability is not our concern.

If anyone else can answer my OP with some facts rather than vague opinions and insinuations about 'income difficulties', I'd be grateful.

Thanks for the useful posts so far.

InHerPrime

Senior_Paper_Monitor wrote: »

and if the lender takes up a direct reference with the employer ????

Why would that be a problem? I am entitled to maternity leave and do not intend to take an unpaid break from work after it finishes. My income will be unchanged as far as they're concerned.

Again, my question was about the bank's policies on this and whether they would withdraw the mortgage and not lend to me at all. My bank actually knows my financial situation and will have full financial details. Our business account is with them too so it wouldn't be the end of the world for us to re-apply for a joint mortgage, especially as we now have two full years of accounts, which we didn't have 8 months ago. Not sure why everyone is assuming this is about me being broke and wanting to borrow money I can't afford to pay back???

gratefulforhelp_2

InHerPrime wrote: »

Hi, am new to MSE but have asked this question on a couple of other forums and not had much of an answer as yet. So here is the situation... my husband and I are looking to buy a house and I have pre-approval for a mortgage with HSBC that is based on my income only as he already has a property outside of the UK and runs his own relatively new company so his income is not as clear-cut as mine. We thought it would be simpler in these credit-crunched times to get a mortgage based on my income only. I got the initial mortgage approval about 8 months ago but we have struggled to find anything we really liked in this market and... our circumstances have changed as I'm now pregnant. We have yet to find a house we like. We're currently renting but would like to buy before the birth (am 2 months in) and ideally in the next month or so.

My concern is, am I obliged to tell the bank that I'm pregnant since I'm the sole earner for the purposes of the mortgage? They did ask me when they approved the mortgage whether we had children or had plans for any (this was 8 months ago) so it has made me think that this would be a factor in their decision to grant the mortgage. As it's only an agreement in principle, I assume this means they can withdraw the offer if I say I'm pregnant? I'm concerned that if they do, I won't be able to get another mortgage approved with another lender. Do banks just not lend to pregnant women as sole earners? I know I am at risk of reduced earnings in the next year. On the other hand, I do have six months paid maternity leave at work and we have other income anyway that we're not factoring in for the purposes of the mortgage so I'm not really the sole earner as it might seem from the application.

Does anyone know what the banks' take on maternity leave / female sole earners is? Would we be better off trying to get a joint-income mortgage, despite my OH's unusual income profile?

When I was in this situation, the fabulous Northern Rock said it wouldn't matter as long as I was prepared to sign a document saying that I would definitely be returning to work after maternity leave. That was before the credit crunch, though.

Cannon_Fodder

I'm not the one worried about income difficulty.

Your words were...

InHerPrime wrote: »

I know I am at risk of reduced earnings in the next year...

InHerPrime wrote: »

Would we be better off trying to get a joint-income mortgage, despite my OH's unusual income profile?

Yes.

Senior_Paper_Monitor

I think your hormones may be sloshing already my dear !

Your question and I quote ...

"am I obliged to tell the bank that I'm pregnant since I'm the sole earner for the purposes of the mortgage?"

.... my rhetorical question response was:

"and if the lender takes up a direct reference with the employer ????"

I don't think this makes any inference as to whether "you are entitled to maternity leave and do not intend to take an unpaid break from work after it finishes."

I have incidentally had dozens of female employees advise me that "that they are off to produce' and will return at the end of their maternity leave - only to find myself with an empty desk, let down customers and colleagues and a need to frantically recruit at the appointed time.

Since a gentle and polite indication of where problems might arise not only doesn't seem to help but induces a third somewhat agressive posting about what you want answering and how, here are the clear hard facts for you:

1) I have never heard of an 'initial mortage approval' from HSBC or anyone else that is valid for 8 months, so I think it reasonable to suggest you will have to go through the process again. Everyone's criteria have continued to tighten over the last year. You may or may not pass this again (I have no reason to suspect you will not - and at no time have I (or anyone else as far as I am can understand the posts above) indicated "that I assume you are broke and wanting to borrow money you can't afford to pay back".

2) If you reapply you may not be asked a question about expected change of circumstances and you will probably - see above - receive a further 'initial mortgage approval'. This may or may not have a wording on it about informing them of any changes to your circumstances - but it will certainly be subject to an underwritten full application which will require more detail.

3) Again during the full application you may not be asked specifically whether you are 'with child' BUT you will receive written advice that you should declare any material change to your circumstances (and in my opinion - having a couple months off and/or being on reduced income as a result of preganancy is a material change).

4) Once the full application is made detailed underwriting will commence and (as I politely tried to draw to your attention this may include direct reference to you employer), such checks can and often do continue after the offer stage until completion. If your employer receives such a request after they become aware of your pregnancy, imminent leave etc (and I suspect they may well become so by the time your mortgage is at this stage) they may (and should) inform the enquirer. If they do so I doubt you will get an offer, or if one is already issued it will probably be withdrawn.

5) Once you receive an offer it will contain something along the lines of this (copied from the current Coventry Building Society offer currently on my desk): The Society reserves the right to vary or withdraw this offer at any time before completion if it subsequently transpires that a) any information you have provided to us to enable to make our lending decision is fraudulent, incorrect or misleading b) material information has not been disclosed (I don't think you need my help to interpret that!)


You now need to make a decision - you may hide it succesully, obtain your mortage and continue to pay it perfectly - but the result may be you get caught, have an application rejected or offer withdrawn (which may result in you being unlikely to be successful with a replacement until you are well past child bearing age!) and potentially (but admittedly unlikely) be prosecuted for a fraudulent application.


In answer to your specific question - Does anyone know what the banks' take on maternity leave / female sole earners is? Would we be better off trying to get a joint-income mortgage, despite my OH's unusual income profile?

Yes - they don't like it (maternity leave for a sole earner that is, and I can see their point) and are likely to tell you to come back once you are back to work, unless you can restructure with your husband's income taken into account. Be warned that HSBC 'cherry pick' and may or may not like the look of this package.

I hope I have now answered your questions to your satisfaction.

Cannon_Fodder

Senior_Paper_Monitor wrote: »

I think your hormones may be sloshing already my dear !

Your question and I quote ...

"am I obliged to tell the bank that I'm pregnant since I'm the sole earner for the purposes of the mortgage?"

.... my rhetorical question response was:

"and if the lender takes up a direct reference with the employer ????"

I don't think this makes any inference as to whether "you entitled to maternity leave and do not intend to take an unpaid break from work after it finishes."

I have incidentally had dozens of female employees advise me that "that they are off to poduce' and will return at the end of their maternity leave - only to find myself with an empty desk, let down customers and colleagues and a need to frantically recruit at the appointed the appointed time.

Since a gentle and polite indciation of where problems might arise not only doesn't seem to help but induces a third somewhat agressive posting about what you want answering and how, here are the clear hard facts for you:

1) I have never heard of an 'initial mortage approval' from HSBC or anyone else that is valid for 8 months, so i think it reasonable to suggest you will have to go through the process again. Everyone's criteria have continued to tighten over the last year. You may or may not pass this again (I have no reason to suspect you will not - and at no time have I (or anyone else as far as I am can understand the posts above) indicated "that I assume you are broke broke and wanting to borrow money you can't afford to pay back.

2) If you reapply you may not be asked a question about expected change of circumstances and your will probably - see above - receive a further 'iniial mortgage approval'. This may or may not have a wording on it about informing them of any changes to your circumstances - but it will certainly be subject to an underwritten full application which will require more detail.

3) Again during the full application you may not be asked specifically whether you are 'with child' BUT you will receive written advice that you should declare
any material change to your circumstances (and in my opinion - having a couple months off and or being on reduced income as a result of preganancy is a material change).

4) Once the full application is made detailed underwriting will commence and (as I politely tried to draw to your attention this may including direct reference to you employer), such checks can and often do continue after the offer stage until completion. If your employer receives such a request after they become aware of your pregnancy, imminent leave etc (and I suspect they may well become so by the time your mortage is at this stage) they may (and should) inform the enquirer. If they do so I doubt you will get an offer, or if one is already issued it will probably be withdrawn.

5) Once you receive an offer it will contain something along the lines of this (copied from the current Coventry Building Society offer on my desk): The society reserves the right to vary or withdraw this offer at any time before completion if it subsequently transpires that 1) any information you have provided to us to enable to make our lending decision is fraudulent, incorrect or misleading 2) material information has not been disclosed (I don't think you need my help to interpret that!


You now need to make a decision - you may hide it succesully, obtain your mortage and continue to pay it perfectly - but the result may be you get caught, have an application rejected or offer withdrawn (which may result in you being unlikely to be successful with a replacement until you are past child brearing age!) and potentially (but admittedly unlikely) be prosecuted for a fraudulent application.


In answer to your specific question - Does anyone know what the banks' take on maternity leave / female sole earners is? Would we be better off trying to get a joint-income mortgage, despite my OH's unusual income profile?

Yes - they don't like it (maternity leave for a sole earner that is, and I can see their point) and are likely to tell you to come back once you are back to work, unless you can restructure with your husband's income taken into account. Be warned that HSBC 'cherry pick' and may or may not like the look of this package.

I hope I have now answered your questions to your satisfaction.

100% spot on.

skippy17

I dont have a high horse to ride in on but I can tell my story.

My wife and I have applied for a mortgage which was sailing through until the bank noticed a pregnancy grant payment on my wifes account statement. They then decided that they would not accept her salery. My wife is entitled to 13 weeks @ full pay, then 26 @ stat. (my wife intends to return after the 13 weeks as to not make an impact to our household income) The reason we did not disclose this information initially was based on advice given to us by our financial advisor. The basis of this advice comes from the sexual discrimination act and rules laid down by the financial ombudsman stating that services cannot be refused due to sex or maternity status.

Having said that, I can agree with the banks view that there is no guarantee that my wife will return to work after her maternity leave finishes.

Having said that, there are no guarantees that 1 or both of us doesn't get made redundant, falls ill, or gets hit by a bus! So where does the line get drawn??

Apparently the law states that this is in contradiction of the law but there has been no case of its type brought forward to set a precedent!

Surely laws need to be introduced to clarify this situation.

So unfortunately, I think it may be best to introduce your OH income to guarantee as the HSBC is your bank! Although we are still awaiting a final decision. We also found that it is clearly evident that each bank has its own policy on this matter.

Best of luck!