Mortgage Application amidst Maternity Leave

Paton147

My wife and I are planning to sell in spring and relocate. It makes sense to move after the baby is born and while we do not need childcare. It also gives my wife time to look for a job closer to our new home if the commute is too much.

Has anyone experienced problems getting a mortgage under these circumstances? We've had mortgages in principle for the amount we need, but I'm concerned the maternity leave and lower pay for 12 months will impact things. The quotes we've had also had just 1 dependant. Does a second child make much of a difference?

The NHS' maternity pay is good and not far from full pay throughout the first 9 months, with exception of the final 2 or 3 months where it drops right down. So its not going to have a huge impact on affordability.

haras_nosirrah

Moving while on maternity leave isn't an issue.

Your issue will be relocating while of maternity leave.

Lenders will want confirmation that she is returning and the pay and hours she will be working when she does but as she isn't then you won't be able to get this.

I have just done a mortgage for someone moving from the south coast to Wales and we needed a signed contract and confirmation the new job was starting within 3 months.

Realistically you will both need jobs to go to if using both incomes and those jobs will need a confirmed start date within 3 months

haras_nosirrah

Just reread and saw that you may not be changing jobs. How far away are you moving as lenders will look at both plausibility and travel costs

Paton147

We are only moving 50 miles away but there will be some upheaval hence why it makes sense to do while she is off.

So the temporary drop in wage won’t impact the mortgage? Her normal salary which she will return to later in the year will be used?

Retired_Mortgage_Adviser

Setting aside the plausibility of the commute and the affordability specifics, there isn't anything in your post which suggests that this would be something hard to place for a half-decent broker.

Plenty of lenders will take into consideration the return to work pay (with adequate supporting evidnece which differs from lender to lender) for borrowers on mat leave, so that shouldn't be an issue.

Yes, the second child will reduce affordability a bit. Try playing around with one of the online affordability calcs to get an idea of how much. The broker/lender will also expect an estimated outgoing for childcare (or a reasonable explanation if you don't expect to have any).

I would definitely use a broker in your place. And also, unless 100% confirmed, I would recommend that you don't mention any plans of changing jobs to the broker.

Paton147

Thanks for the advice.

The frustrating thing is we have an exit fee of approx £1300 until October 2020 but it just isn’t practical to stay in this house until then.

We really need to list in April/May with a view to staying with the TSB as that £1300 renders any other deal redundant compared with a marginally more competitive 2 or 5 year fix from another lender.

If we have to pay it and move lender, it’s not to be sniffed at but I won’t lose any sleep over it.