Mortgage refused due to pregnant & going on mat leave

weejoolsy

My friend has been trying to sell her house for some time. She recently had an offer on the house and accepted. They have seen a new family home and had a verbal offer accepted. However their mortgage lender has just refused their application on the grounds that she is pregnant and due to go on maternity leave shortly. She fully intends to go back to work (who can afford not to with 2kids). And now is terrified that they are either going to be homeless or have to pull out of the sale of their far to small house.

Is this not discrimination? Are mortgage lenders allowed to refuse on these grounds? Any advice would be most welcome.

gazfocus

Could they not sell their house and rent until she goes back to work?

I don't see how it's discrimination to be honest because all the lender is doing is assessing what your friends income is going to be a few months down the line.

JQ.

I also don't see how it's discrimination. Your friends income is about to drop considerably, that's all the bank will care about - it's a financial assessment.

Cazza

That's not the policy which would usually be applied by most mortgage lenders. Maternity leave would go via an underwriter, most would want an employers reference confirming when you will be returning to work and what hours you will be doing. Any lending decision would be based on the expected salary when she returns to work.

Does you friend have broker? This is basic stuff for any good broker to sort out. If she doesn't have one, get one!

DannyboyMidlands

Discrimination? Oh jeez.

What are you saying, that anybody should be able to borrow whatever they like from whoever they choose no matter how much they earn, on the basis of some flaky future aspiration?

They're not going to be homeless. They need to stay put and be crowded or buy a cheaper house.

The_J

Actually, there is an argument for discrimination here. If they have savings to cover the period she is off work what is the problem?

Maternity leave is an entitlement.

gazfocus

The_J wrote: »

Actually, there is an argument for discrimination here. If they have savings to cover the period she is off work what is the problem?

Maternity leave is an entitlement.

Yes, but there's no guarantee that she'll go back to work after the maternity leave. What if the child is born with a disability and needs full time care, etc?

betmunch

Ignoring the debate on discrimination.

Surely, just use a lender that will accept she is going to go back to work and problem is solved!

The_J

gazfocus wrote: »

Yes, but there's no guarantee that she'll go back to work after the maternity leave. What if the child is born with a disability and needs full time care, etc?

I can understand your point but if you're going to "guess" at what's going to happen why not take it further, why give anyone a mortgage? After all, they could be hit by a bus the next day? They could suffer a stroke and never be able to work again?

Thrugelmir

Cazza wrote: »

most would want an employers reference confirming when you will be returning to work and what hours you will be doing. Any lending decision would be based on the expected salary when she returns to work.

The employee has the right to remain off work for up to 52 weeks on maternity leave, and is required to give 8 weeks notice if intending to return earlier than this.

So the employer has no idea as to the outcome.

magpiecottage

I think if the OP put in a complaint the lender might have some difficulty persuading FOS it had not acted unlawfully.