Mortgage Application with Childcare

skycar

Hi, maybe some questions for any resident underwriters or those that have been through the process of mortgages and childcare...

We are applying for a 5-year mortgage and have a child that will be in nursery for less than 24 months of that mortgage.

We have been advised that, as it stands, the childcare does affect the amount we can borrow. Without the childcare we would have no problem whatsoever receiving in excess of the full amount required (same old story eh! ).

Will the underwriters take into account the fact that childcare will be present for less than half of the mortgage?

We do have the option to take our child out of nursery and into the care of both sets grandparents. We would rather stick with the nursery as we know we can easily afford it.

Would the underwriter accept a letter explaining that, should we be accepted for a mortgage, we would put our child into the care of grandparents? Both sets of grandparents are happy to provide signed confirmation that they will be providing the childcare.

kingstreet

If the cost is visible on your payslips and or bank statements, you are going to find it difficult to get it excluded from affordability.

skycar

Thanks for the reply kingstreet.

We do have the costs visible on both payslips and bank account but I was just wondering if lenders take into consideration the fact that the childcare would be for a short period of the mortgage. Also, would they accept signed confirmation that the grandparents will be caring for the child should the mortgage be agreed? Or is that a bit chicken and egg in that they would want to see the child out of nursery first and then agree the mortgage?

kingstreet

If the cost is there, it was be factored-in as if it is there forever.

Changes in a few years won't be part of the scenario.

You really need to ask your lender about the specifics of your case. We can only generalise on here.

skycar

Hi kingstreet, generalisations are fine at this stage thanks and you have answered my first query

Thrugelmir

Your financial circumstances could change for any number of reasons in 2 years time . So lenders can only base decisions on the information as it stands today. Being overly optimistic is often the root cause of where borrowers find themselves in financial difficulty at a later date. A mortgage is a marathon not a sprint.