Remortgage and Maternity Leave

ChopperST

Having been trying for children for a long time and thinking it would never happen my wife and I have just been given the amazing news we are expecting twins.

Obviously this has meant we are delving into our finances for the future and realised our current mortgage product will expire during her maternity leave.

What will our options be when we come to remortgage? - Do lenders consider your income at the time (my wife will obviously be on SMP). Or will they be happy with a letter from her employers confirming her salary when she returns to work.

Mortgage product at the time will be a 75% LTV on a house worth £340k according to the major indices as of Q3 2014. We will also have circa £60k in savings and investments and no other debts.

I have employed income of £50k on my own plus self employment bringing in £10k a year - would this be sufficient for a lender? My wife also receives industrial injuries benefit of £2500 a year.

Our existing provider is Skipton who we have been overpaying for the last 18 months - would we simply be able to remortgage with them? I would imagine they would ask any change in circumstances at the time of application though which clearly two children is!

Hope this makes sense - I imagine the answer will be speak to a broker!

Thrugelmir

Your existing lender will offer you a range of products without any requirement to provide details of your finances. By default you will fall onto the interest rate as specified in your current product documentation, this is normally the lenders SVR.

Suggest you call them. Then post back here with the options available.

ChopperST

Thanks for the reply - Skipton have a horrendous SVR so that wont be an option.

Potentially could use some savings to decrease LTV but this is money invested for the long term I would rather leverage against the mortgage.

Its a while off yet but I like to have a long term plan, thanks for replying.

caileag

No real mortgage wisdom to bring, apart from recommending you speak to a broker. I've always been happy with London and Country, but I am a "simple case" (awh!) and I know other people have had different experiences.

However - TWINS! Wonderful news, congratulations!

ChopperST

I used a broker for our last application and lost a bit of faith to be honest.

Thanks for the congratulations. Its still sinking in, as a medical professional who uses ultrasound I knew straight away yesterday there was two when we were scanned and swore out loud. My wife couldn't see and thought there was something wrong! :rotfl:

dimbo61

There are some very good long term fixed rate deals on the market which would give you security for the next 4/5/10 years while the kids are young.
You can sign up to a new deal 3/6 months in advance
Speak to a whole of market mortgage broker

ChopperST

Thanks for that, I'm well aware of the deals that are out there, however we remain in a fix for the time being so we can't remortgage just yet due to punitive ERF's. It was more a bit of a fact find as to how lenders treat applications whilst a woman is on mat leave.

Personally I won't be fixing for that long, I honestly can't see interest rates raising that high in the medium term and if they do we have a reasonable amount of capital to reduce our mortgage balance if needed but at the moment its doing better leveraged against the mortgage in my S&S ISA than paying it off.

kingstreet

Some lenders don't like maternity leave and will have all kinds of stipulations and expect you to produce evidence of savings to cover the leave period.

Others require a copy of the last pre-maternity leave payslip and standard return to work letter showing the return salary and date.

Childcare post-leave will also be an affordability factor, so consider that too.

You can research which do what, or appoint an independent broker to act for you.

ChopperST

Thanks Kingstreet.

Certainly have more than enough savings to cover the leave period and my wage will more than cover current outgoings, but as above would rather keep the savings as that than pay off the mortgage capital.

Thrugelmir

ChopperST wrote: »

It was more a bit of a fact find as to how lenders treat applications whilst a woman is on mat leave.

The actual date of return to work is determined by the individual concerned. Many people work part time hours upon their return. You can even be made redundant while on mat leave. A lot can change in a year.