Remortgage and maternity difficulties

matthewr

Hi all,

Just thought I would post this up and see if anyone could advise me....

I'll try and keep it short...

My wife and I have recently been granted planning for an extension to our bungalow and have come to the end of our mortgage deal so are on the svr which is 4%

We want to look for a new mortgage deal but have a 4 month old son and my wife (who is self employed) is on maternity.

We went to our current lender to get a remortgage but were advised that we would bedeclined because my wife is on maternity and may decide not to go back to work (which is understandable but rediculous!).

So now I'm concerned that if I begin the extension then I won't get a remortgage when the wife does go back to work as an unfinished building project will devalue the house. so I find myself between a rock and a hard place looking for any advice from you guys!

Matt

dimbo61

Simple answer is do not start something if you cannot afford to finish it.
If your wife does return to work then look at other lenders.
You have given very little information !
Own a bungalow and wife had baby boy now aged 4 months ( well done Dad)
Giving your wife and son a secure home should be number one priority.
Extension can wait. If you have the income and equity to get a new bigger mortgage then great but you have given No Information !

dimbo61

You are now on the SVR at 4% but this will rise when the BOE rate does increase.
Did they offer you any deals as an existing customer on your outstanding mortgage balance ?

Thrugelmir

matthewr wrote: »

(which is understandable but rediculous!).

Lenders work on the basis of uncertainty not risk in such circumstances.

matthewr

I didnt give all the info out to start as it would have taken a very long time and i was hoping some people would read the question, however i'll add a little more...

My current mortgage is with natwest and is a joint mortgage with my wife. Between us we earn more than enough for a remortgage but as she is self employed and on maternity natwest will not consider her income.

The planning for the extension came through in September 2012 so i need to have started the extension by September next year or i'll have to reapply for planning and lose all the money i have spent on getting it through in the first instance, hence the concern to get things rolling.

As far as equity we had the house valued at 215k last summer having bought it for 180K two years before and with the extension completed i have been advised that it will be worth in the region of 300k (these are legitimate numbers...bungalows in the street that have been extended in the same way have gone for this price and higher). Current mortgage stands at 155k.

Natwest did offer us a remortgage but the rate was poor and at the time we knew we could get a better deal. Unfortunately i did not realise the whole maternity issue.

To be honest, you may have already told me what i need to hear i.e. 'dont start something you cant afford to finish'. I guess i was hoping for someone to come up with an option i hadn't thought of as i'm desperate to increase the size of the house!

Thrugelmir

matthewr wrote: »

My current mortgage is with natwest and is a joint mortgage with my wife. Between us we earn more than enough for a remortgage but as she is self employed and on maternity natwest will not consider her income.

Being self employed technically your wife has just stopped working. There's no certainty as to when your wife will return nor the level of income. The lender cannot assume either that the income level will be the same as before. So the application will fail on affordability grounds as the lender cannot base decisions on crystal ball glazing.

Solsol

We had to wait until I'd been back at work for three months after maternity leave before we could move house. Annoying as if we'd been able to do it while I was on leave we would have done it before the MMR rules came in in April, plus we would have been able to do it before house prices went crazy.

BUT it also meant I had a great year off work without the stress of moving and just got to concentrate on my son without the extra stress that moving brings with it.

I'd suggest you wait until your wife goes back to work as you'll find it easier plus it'll be great for you and your wife to spend some quality time with your son before she returns to work and you have building work going on.

Just my opinion but good luck in what you decide to do

Mrs_Soup

If your baby is already 4 months old when is your wife planning to go back to work? maternity allowance will run out after 9 months- as she is self employed does she plan to start back then as that would be this Christmas so well within your deadline of next september to start.

dimbo61

You only need to put down the concrete base to start the extension.(£5000/6000)
Would you consider selling with planning permission as the property may now be worth more ?
That way who ever buys the property can do the work to there taste

matthewr

@thrugelmir makes total sense, I guess I had hoped they would just look at her previous 12 years of books and make a decision on that. Perhaps we're just a bit spoilt as we have never been turned down a mortgage or loan.

@solsol yes my wife is certainly enjoying the time she is spending with both our 4 month old and 7 year old... There's a lot to be said for that

@mrssoup my wife plans to go back to work in September once the school term has restarted so that she can spend some time with our 7 year old. 3 months on from this and I will have more than enough time to get the extension rolling. The only pain really is that I had forgotten how much stuff a new born brings; there is literally 'stuff' everywhere lol! Hence my want to get the extension built.

@dimbo61 I had considered selling with planning but my wife soon put a stop to that idea! We live on a quiet street where there are about 6 other kids my eldest sons age and the schools are only walking distance. She says we'll struggle to find that again and I think she's probably right.

Thanks for all the responses