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Maternity Leave Mortgage Dilemma
SoapyG
Posts: 6 Forumite
Hi - could I get some opinions please?
We are very happy to be expecting our first baby in January - Hurrah!
However we live in a tiny 1 bed flat so space is definitely going to be at a premium. We have thought about doing a loft conversion, which would cost about £20K, rather than move to a 2 bed, which would probably increase our mortgage by about £40K looking at local prices.
Our fixed rate mortgage comes up for renewal in April 2011, however I will hopefully be on mat leave by then, so on a lower income.
Should we:
a) Remortgage now while we both have higher incomes so as to get a better rate (it shouldn't affect the total of the mortgage as we don't want to borrow anywhere near the top of our potential loan). We will have to pay an exit fee for the fixed rate mortgage but our monthly payments should go down a bit as our current rate is about 5%.
b) Remortgage in April and avoid the exit fee but have to declare a lower income.
c) Try and get a loan for the loft conversion and remortgage after the conversion with a higher LTV ratio (but a lower income).
And then there's the option of renting out our flat and renting a 2 bed for the first couple of years while we both work part time for childcare - DILEMMAS!!!!!
All helpful suggestions appreciated!
We are very happy to be expecting our first baby in January - Hurrah!
However we live in a tiny 1 bed flat so space is definitely going to be at a premium. We have thought about doing a loft conversion, which would cost about £20K, rather than move to a 2 bed, which would probably increase our mortgage by about £40K looking at local prices.
Our fixed rate mortgage comes up for renewal in April 2011, however I will hopefully be on mat leave by then, so on a lower income.
Should we:
a) Remortgage now while we both have higher incomes so as to get a better rate (it shouldn't affect the total of the mortgage as we don't want to borrow anywhere near the top of our potential loan). We will have to pay an exit fee for the fixed rate mortgage but our monthly payments should go down a bit as our current rate is about 5%.
b) Remortgage in April and avoid the exit fee but have to declare a lower income.
c) Try and get a loan for the loft conversion and remortgage after the conversion with a higher LTV ratio (but a lower income).
And then there's the option of renting out our flat and renting a 2 bed for the first couple of years while we both work part time for childcare - DILEMMAS!!!!!
All helpful suggestions appreciated!
0
Comments
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You know you don't have to remortgage - if you don't you will drop onto the lenders SVR which can be extremely cheap at the moment. So, first question has to be, what is your lenders SVR?0
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Good point, thank you - that should give us some breathing space while we work out what to do!0
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I thought standard maternity leave was 6 months on full pay? Never had a baby so could be very wrong!0
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LittleMissAspie wrote: »I thought standard maternity leave was 6 months on full pay? Never had a baby so could be very wrong!
Nah, standard maternity leave is 'statutory maternity leave', around £100 per week i think. Not sure as not had a baby myself either.Squish0 -
LittleMissAspie wrote: »I thought standard maternity leave was 6 months on full pay? Never had a baby so could be very wrong!
You are very wrong, I think. Some jobs might offer that, but the minimum's an awful lot less....much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0 -
You should be able to declare your normal salary. The law demands that your employer keeps your job open for you whilst on maternity leave so you are still employed throughout (some mortgage companies ask for a letter from your place of work stating your job, salary and date of return to work).
During maternity leave your pay is untouched; you don't receive it but receive SMP instead:
If you qualify for Statutory Maternity Pay, it is paid:- for the first six weeks at 90 per cent of your average gross weekly earnings with no upper limit
- for the remaining 33 weeks at the lower of either the standard rate of £124.88, or 90 per cent of your average gross weekly earnings
Info on SMP is all on DirectGov.3.9kWp solar PV installed 21 Sept 2011, due S and 42° roof.
17,011kWh generated as at 30 September 2016 - system has now paid for itself. :beer:0 -
Don't underestimate the amount of space a baby (read toddler) takes up. You will need more downstairs space as well (if not more so) as somewhere separate for baby to sleep.0
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We bought a new house while I was on maternity leave. Nationwide wanted confirmation from payslips of my normal salary and a letter from me confirming the date I expected to return to work. Nothing more and my full salary was taken into account. Made slightly simpler by the fact that this was my second child and I was already working part time since returning after the birth of first child. They may ask if you are going back part time and reduce you salary accordingly, but I don't know about that. And this was recent as well, we applied for the mortgage 1st week in February this year.
6 months full pay would be extremely generous! I thought my company's scheme was good, which is 18 weeks full pay - but it all (amounts in excess of SMP) has to be paid back if I don't return to work for minimum 12 months after mat leave...
The people who mind don't matter, and the people who matter don't mind
Getting married 19th August 2011 to a lovely, lovely man :-)0 -
We just got a mortgage (Britannia) and I am on maternity leave. They took my full salary into account, but asked me if I was going to return to work full time.
Different lenders may vary though.
QT0 -
Thanks very much - at least we have time to think about things now we know my full salary is being taken into account.0
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