Mortgage refused due to pregnant & going on mat leave

Thrugelmir

magpiecottage wrote: »

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

Has the lender have actually cited the reason for the decline. Or is it a presumption?

becominganobsessivesaver

I spoke to the post office about this the other day and they said they would lend, but would need a letter from the employer and proof of savings to cover the reduced earnings on maternity leave. Very pragmatic approach imo and worth a try for your friend.

Mrs_Z

weejoolsy wrote: »

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.

Well, a) I wonder if they are upsizing so borrowing more b) they've probably done their calculations based in 2 people earning full time with 3 mouths to feed whereas in reality there will be just 1 income for and 4 mouths to feed, + increased mortage payments. IF she decides to go back to work, it'll probably be part-time AND the childcare costs have doubled. Oh yes.

Simon_gloster

weejoolsy wrote: »

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.

It's not discrimination, it's lending policy.

If they don't want to give you their money on their terms, find someone who will.

DVardysShadow

Of course it is discrimination. lenders are rejecting applications all the time for insufficient income or insufficient equity. The key question is whether it is lawful discrimination. If it is for not demonstrating the means to cover the mortgage during the maternity leave rather than due to a blanket policy of rejecting takers of maternity leave, I can't see the problem

bigadaj

It rather depends on your definition of discrimination, this is currently being defined as a bad thing curtailing people's entitlements apparently. However it could also be in terms of such things as taste, ie being able to differentiate between good and bad quality.

mysk_girl

Nationwide gave me and OH a mortgage while I was on maternity leave, all they wanted was a letter from me confirming I would be returning to work. Nothing from my employer at all.

Would it be worth trying a different lender?

Gentoo365

It's not currently unlawful discrimination. As long as they would act in the same way if a male applicant informed them that he was taking paternity leave.

It is not just a 'career break' that is of relevance. It is the fact that their will be an extra dependent and hence extra costs.

It would be unlawful if they were to incorporate into the affordability checks a parameter that reduced the amount they would lend to young female applicants to account for any future maternity leave she may or may not take.

This is the current situation anyway. At some point someone will take it further to see if the law needs to be changed (or clarified). It happened with car insurance remember.

Gentoo365

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.

True, but getting a mortgage is not.

CBR600F_2

Yes, it's discrimination. Me not lending my car to a multiple convicted car thief is discrimination too. And when I'm shopping, I discriminate between breakfast cereals.

So the house it far too small? She should've thought about that before she decided to do the ugly dance without contraception.

Maybe she can take her name off the mortgage and re-apply with just her husband's income. Is that a possibility?