Should I notify the lender about coming addition to the family?

kaa_3

Hello Guys, I would like your view on the following please. Me and my wife are FTB's and in the early stage of obtaining a mortgage. We had meetings with couple of High street banks already, just to evaluate our chances. It will be joint FTB application.
We are employed at the moment, so the lenders are taking into account joint salary figure. The thing is, my wife is four months pregnant, therefore will be going to maternity leave in the near future. Her employer is going to support her as per her maternity rights. Obviously, we will be facing higher outgoings in 5 months time, and only one party is going to be in FT employment.
I am not really sure whether we have to tell this to a potential lender or not? Will it affect our financial position and chances to obtain a mortgage?
We are looking for a 70% LTV mortgage on the property value of £250k.
Thank you for your advice.

The_J

No, lenders do not ask this question.

Thrugelmir

Be honest with yourselves as well. Little point in over committing to a mortgage you struggle to afford.

marathonic

I'm not sure if this is your plan but, if I were in your situation, I'd be very tempted to go for a Fixed Rate for 5 years.

With a child, I'd take a lot of comfort in knowing that my mortgage payments are fixed until the child starts school.

The Post Office appears to have a 5-year fixed rate available for 3.59% with a £1,495 fee. There are ones with smaller fees and a higher rate but, with a £175,000 mortgage and a sizeable deposit, the higher fee appears to make more sense for you.

That's just my thoughts based on the rates I see online. There may be better available.

lowlitmemory

We are in a similar-ish position, although I am only a few weeks' pregnant and we have already found a house, had an offer accepted and got our mortgage. I wouldn't be telling them anything though. You don't have to, and you don't know what will happen in the future. I agree with Thrugelmir too - just ensure you are able to afford the mortgage.

dcrane

I think you need to ask yourselves a couple of questions...

1. What is the maternity pay like with your wifes company?

2. Will your wife be returning to work?

and

3. Will you be able to make the repayments to your mortgage along with any other bills and financial commitments while she is only in receipt of maternity pay, or after maternity pay stops should she decide not to return to work?

If, when you have looked at the facts, you can still comfortably afford the mortgage I wouldn't see any need to tell the mortgage provider. However, if your not going to be able to afford it once baby comes along you may want to consider looking a deal (as a pp suggested) with a longer fixed rate that you can afford, maybe on a cheaper property.

kaa_3

Much appreciate your wise views, thank you!
- dcrane, you have put it right to the point, I am asking myself exact questions. We don't know yet exact structure of the maternity pay of my wife's employer, she will be speaking to a HR next week.
We are currently renting a property in the same area and by the looks our monthly mortgage repayments would be less then our current rent. I am considering a fixed rate deals 3-5 years, as it will give us some comfort as you have suggested.
- lowlitmemory, well done and good luck with your pregnancy

MiniSis

To work out if you can afford it go for the worst case scenario, your wife gets SMP for 9 months at £500 odd a month. Then you'll get CB of £80 a month. Can you afford to pay the mortgage on your salary alone? I'd your wife goes back to work will you be able to afford child care?