remortgage on maternity leave

bailey2658

Hi,

We are looking at re-mortgaging in a couple of months and just wondered whether anyone had any recent experience of re-mortgaging whilst pregnant or on maternity leave? I know a lot of lenders will use your back to work salary which is fine as I am planning to go back full time after approx 9 months (baby due April, back to work in December) but I don't know whether they take into account future childcare costs as at the moment I'm unsure exactly what they will be and may even have family that can help with childcare, do they use a nominal amount of predicted childcare costs if you are pregnant or at an early stage of your maternity leave? I already have one little boy at nursery which has a big affect on our mortgage affordability so if they take two lots of childcare into account it will make it incredibly difficult for us to get a re-mortgage even though we know we can quite happily afford the repayments. Just don't want to go down the application route if there's a good chance our application will get refused and I cant seem to find any answers on this anywhere? Thanks for your help!

Yorkie1

Have you looked at the interest rates your current lender is offering to existing customers?

Are you planning on asking to change either the length of the term left, or the amount borrowed?

If you're not changing anything, want to stay with present lender, and your house's value hasn't decreased so significantly as to make a difference to the LTV, then most lenders offer you the option to change products online.

Because this does not involve them advising you on the suitability of the product for you, they don't check affordability or deal with it as a full application.

If you change anything re the existing term / amount, or try to change products with them via a meeting / phone call with one of their advisors, or change lender completely, then you're looking at a full application / affordability check.

bailey2658

Hi thanks for your response, we are currently with Halifax but their rates aren't great compared to others and we would like to reduce the length of the mortgage too which would probably mean affordability checks - we are on their SVR at the moment - also we are looking for a 2 year fixed really rather than a longer fixed term as potentially looking to move in a couple of years. But no lender seems to say anywhere whether they take potential future childcare costs into account or not though, and what they would be.

Thrugelmir

bailey2658 wrote: »

we would like to reduce the length of the mortgage too

Why? You can make overpayments on the majority of mortgages without incurring any early repayment charges. If you intend moving in a couple of years time then presumably you'll be extending the term again anyway.

Remortgaging isn't a cost free change unless there's no product fees, and free legal and valuation costs. So is it worth it for 2 years? As you may end up switching lender again when you move house.

But no lender seems to say anywhere whether they take potential future childcare costs into account or not though, and what they would be.

If you've another dependent on the way. Better to be honest with yourselves. If affordability isn't an issue then shouldn't be a problem.

Lenders will base affordability a different set of criteria to yourselves. Not least stress testing at 7% interest rates for example. People are overly optimistic with regards to their own finances generally.