Mortgage with Maternity Leave (again)

Lungboy

I realise similar questions have been asked previously, but things seem to change so quickly with mortgages that I wanted to check what a broker told me this morning.

We are looking to get a mortgage, but my wife is ~3 months into her maternity leave. She's undecided about going back to work full or part time, and the mortgage might well be the decider as if we need her full wage to get the required mortgage then that's what she'd do.

The broker said this morning that at the moment, there are only 2 lenders (TSB and Halifax) that will lend to us based on her full wage when she returns to work. All other lenders will need us to be within 3 months of her return to work to take her full wage into account. Is this true? Do lenders have a blanket policy or will they look at individual situations? Waiting several months to be able to access more lenders would be frustrating but not ultimately the end of the world.

Lungboy

Another set of questions, as this is all baffling. How often do people switch mortgage? Do you simply change from one to another when your initial rate ends to avoid being switched onto the SVR? I'm really struggling to work out if there's any point going for a fix over the best discount variable or trackers if I can jump from one to another to make use of the better initial rates. I'm looking at ~59% LTV mortgages if that matters.

Lungboy

Any help would be very gratefully received.

libf

Lungboy wrote: »

Another set of questions, as this is all baffling. How often do people switch mortgage? Do you simply change from one to another when your initial rate ends to avoid being switched onto the SVR? I'm really struggling to work out if there's any point going for a fix over the best discount variable or trackers if I can jump from one to another to make use of the better initial rates. I'm looking at ~59% LTV mortgages if that matters.

No idea about maternity leave so can't help there, but my two cents on this one...

After my fix ended on my first mortgage I switched to another fix because my LTV had dropped and I could get a better rate. I actually wish I hadn't now as I'm moving a year and a half into a 4 year fix and so have to pay an ERC (although luckily it's relatively low because my current property is shared ownership).

My new mortgage will be a 5 year fix because there's no way in hell that I'm moving again before that, interest rates are very low and also because I'm using Help To Buy so it ties in with hopefully being able to re-mortgage to pay off the loan when the interest payments start.

Lungboy

Ok, now I'm even more confused. I spoke to another broker today, this time a chap from Countrywide. He agreed that there were probably only 2 lenders that would take a letter from my wife's employer, but he had Halifax and Nationwide. He also disagreed with the 1st broker's suggestion to not go for a MIP until we find a house that we like, but to go for one now and extend it if it expires. Argh!

Lungboy

I spoke to a 3rd broker. He says he tended to agree with broker #1 and that while we are still just looking, there's not really any need to get a MIP. Having said that, he suggested we could go directly and speak to Halifax and they might be able to do a soft-check MIP which wouldn't leave a credit footprint. This sounds like the sensible option to me.

Thrugelmir

Lungboy wrote: »

All other lenders will need us to be within 3 months of her return to work to take her full wage into account. Is this true?

There's no certainty that an individual will return to work full time. Some lenders will therefore wish to have this certainty.

Lungboy

Thrugelmir wrote: »

There's no certainty that an individual will return to work full time. Some lenders will therefore wish to have this certainty.

I'd read that a letter from her employer stating various things would be enough, I didn't realise that that was only for 2 or 3 lenders and the rest wouldn't accept it.

Lungboy

Am I right in thinking that all affordability calculations are done based on us buying the house we want? What about things like childcare, which will only be for 2 years and then will be almost nothing? That seems to be the biggest negative to affordability based on online calculators, so I'm weighing up salary sacrifice for childcare vouchers vs a higher basic wage. The proposed changes to both childcare vouchers and the 15 hours free childcare from age 3 are making things even more complicated.

Thrugelmir

Lungboy wrote: »

What about things like childcare, which will only be for 2 years and then will be almost nothing?

And the rest. Children have an impact of a family's budget.

Lungboy

Indeed, I meant the pure childcare cost of a nursery place which will be very low when the 15 free hours is doubled to 30 as planned by the Tories.