Mortgage application whilst preg / on maternity leave?

mictogirl

Hi all.

I'm a newbie here so please be nice! Really hoping someone can help answer a fairly simple question before I set off checking out mortgage brokers.

I'm currently pregnant and it's likely by the time I get to the application stage of my new mortgage I'll be on maternity leave. I have heard that the fact my payslips will have 'maternity pay' on them might affect my mortgage application - has anyone come across this before? One person said her joint application with her hubby was rejected for this reason, even though he was the breadwinner and her regular salary was much less.

In our case, the mortgage is going to be in my name only (since DH earns a pittance basically and just helps out with bills). Obviously I'll be going back to work after having this baby since we've got a mortgage to pay and it's what I did after the last baby. But the mortgage companies don't know that do they? Will I be seen as a risk?

If anyone has any experience or advice on this I'd greatly apprecite it!

Thanks in advance!

AndrewSmith

It will all depend on other factors in your situation such as credit history, work history,employer maternity T&C's etc.

I know that it is possible to obtain a mortgage whilst on maternity leave as long as it is your intention to return to the same position/salary etc immediately.

It will also depend on the maternity package offered by your employer.

christineperseus

The Nationwide gave me a 150K mortgage over 15 years whilst 8 months pregnant - that was 10 years ago!
AND I was only a 'contractor'

Snaggles

It does depend on the lender. You might come up against some that will say you need to get confirmation from your employer of return to work date/salary etc, and even then might not agree the mortgage if you are still some time away from going back to work. Or some might just be happy to take your word for it, providing you can meet the repayments in the meantime.

If you are applying for a mortgage, you could always ask the question before you go ahead with the application - that way you are not going to end up with loads of credit searches from lenders that wouldn't have agreed a mortgage for you anyway.

AndrewSmith

mictogirl wrote: »

Hi all.

I'm a newbie here so please be nice! Really hoping someone can help answer a fairly simple question before I set off checking out mortgage brokers.

If anyone has any experience or advice on this I'd greatly apprecite it!

Thanks in advance!

To be honest, your mortgage broker is going to be the best person to whom you should put the question. He/She will know all your details and will be able to give you the benefit of their experience/knowledge of the mortgage market before even approaching a lender.

Remember that a broker does not carry out a credit check so you are doing yourself no harm by asking their opinion.

This sort of issue is exactly why brokers are so valuable to the mortgage customer, and is precisely the sort of thing that they deal with on a day to day basis.

Call or meet with your broker and see what they say. After all, no one here can really answer you definately as they do not know all your details.

mictogirl

Thanks for the advice folks. I also had the bright idea of searching previous posts on the subject, doh! It does seem like it depends on the lender, which is annoying as I may not necessarily be getting the best rate that way! At least my credit rating and past work history are good.

Snaggles - I'll definitely be asking before I apply, no way I want to have to go through the process all over again. The less stress whilst about to pop or with my new baby, the better!

izoomzoom

I am gonna be in the same boat next year too.

Can someone please tell me what a very safe income multiple is. I know that it will depend on lender, but a ball point figure will help.

I don't think I will be going back to work on the same wage / hours, and what I ultimately decide will be based on what income I have to earn in order to meet my mortgagee lending multiple / our affordability.

Many thanks

mictogirl

izoomzoom, I worked through the budget spreadsheet on here to figure out how much we needed to earn between us to work out how much mortgage we could afford. All the online mortgage calculators are telling me I can get up to 240k, but there's no way I could really afford that much and am looking more in the region of 180k.

I'm actually not going to be going back to the same job since we're moving away, so I'm a little scared to get something in writing from my employer saying I will be doing - obviously they don't know I'm not going back yet though! I've just had to do our sums very carefully and worked out what I think both DH and I can get at new jobs in our new area and taken the amount of mortgage we want from that. Hope that helps a little!

Snaggles

A lot of lenders have a criteria of somewhere around the 3.5 x higher, 1.5 x lower mark (or 2.75 x joint). Although most are prepared to be flexible and it will also depend on your commitment level, as they need to ensure you can meet the repayments.

AndrewSmith

mictogirl wrote: »

I'm actually not going to be going back to the same job since we're moving away, so I'm a little scared to get something in writing from my employer saying I will be doing - obviously they don't know I'm not going back yet though!

This will cause you a problem. On a lender's application form you will be asked specific questions relating to the continuation of your current employment. If you are aware that you will be changing employers then you have to declare it.

Lenders will pick up on such things especially if you are moving some distance away and will want to know how you will continue to carry on working at the same place if you are moving away.

Once you declare that you are changing jobs they will want to see a contract of employment for the new employer and may possibly not want to complete and release funds till either:

a) You have started the new job
b) You are outside of your new job's probationary period.

Honesty is the best policy as the consequences of not truthfully answering questions on the application can be quite severe.

mictogirl

In that case I would be totally screwed. Maybe I'd better get an application in before going on leave (20th July) so it's not even an issue.

Thinking about it though - if you move far away from an area, do you always have to prove you've got a new job to go to at your current salary???