Wife is pregnant, will this affect mortgage application? 7 February at 2:26PM in Mortgages & endowments 21 replies 1.1K views

ManuelG

My wife would be the main contributor towards a mortgage, and our baby is due in August. Are there issues surrounding a mortgage application? She's intending to take the full year's maternity leave, we could service a mortgage through savings during the weeks she's not on full pay, and she intends to go back to work afterwards.

Does this:

Affect an application in the first place?

Affect an application that's in process, if any house purchase is not completed before she goes on maternity leave?

kingstreet

A lender will want to know if she is returning to work on the same terms, or different.

Any estimated childcare costs will need to be factored-in to affordability.

MWT

ManuelG said:

Does this:

Affect an application that's in process, if any house purchase is not completed before she goes on maternity leave?

You have an obligation to inform the lender of any material change in circumstances and this would obviously qualify...

chanz4

Its surprising how much childcare / dependant can effect lending

TheJP

At this stage of the pregnancy and depending on when you are making the application vs when she starts maternity are key. If your application is between now - 3 months then i don't see it being impacted. Even if they ask do you have any dependants the answer is no, this would change when it comes to re-mortgage. They will use her current payslips as proof of affordability. 

If you apply after baby is born then you will need confirmation from her employer that the plan is for her to return by X date, again childcare costs at this stage are irrelevant because they are not a cost yet it would only come into play when you start paying childcare fees etc.

kingstreet

This is from a NatWest app completed yesterday;-

"Are there any personal changes that will affect the customer's ability to pay this mortgage e.g. change to job, changes to

income or expenditure, changes to profits & family circumstances?"

I would never advise a pregnant client to answer no to this.

TheJP

kingstreet said:

This is from a NatWest app completed yesterday;-

"Are there any personal changes that will affect the customer's ability to pay this mortgage e.g. change to job, changes to

income or expenditure, changes to profits & family circumstances?"

I would never advise a pregnant client to answer no to this.

Lenders cannot by law ask if you are pregnant. It all depends on whether the pregnancy will impact the ability to pay the mortgage, the OP has clarified that it wont. We don't know the OPs plans around childcare or if grandparents will offer this. The material change would be when they come to re-mortgage and they then have a financial dependant.

housebuyer143

TheJP said:

kingstreet said:

This is from a NatWest app completed yesterday;-

"Are there any personal changes that will affect the customer's ability to pay this mortgage e.g. change to job, changes to

income or expenditure, changes to profits & family circumstances?"

I would never advise a pregnant client to answer no to this.

Lenders cannot by law ask if you are pregnant. It all depends on whether the pregnancy will impact the ability to pay the mortgage, the OP has clarified that it wont. We don't know the OPs plans around childcare or if grandparents will offer this. The material change would be when they come to re-mortgage and they then have a financial dependant.

But there will be changes to income, and family circumstances. It will affect the ability to repay the mortgage even if they have savings as a huge chuck of the income maybe reduced. You tell a mortgage lender that, they are probably not going to be that comfortable lending you the amount they initially agreed to. 

TheJP

housebuyer143 said:

TheJP said:

kingstreet said:

This is from a NatWest app completed yesterday;-

"Are there any personal changes that will affect the customer's ability to pay this mortgage e.g. change to job, changes to

income or expenditure, changes to profits & family circumstances?"

I would never advise a pregnant client to answer no to this.

Lenders cannot by law ask if you are pregnant. It all depends on whether the pregnancy will impact the ability to pay the mortgage, the OP has clarified that it wont. We don't know the OPs plans around childcare or if grandparents will offer this. The material change would be when they come to re-mortgage and they then have a financial dependant.

But there will be changes to income, and family circumstances. It will affect the ability to repay the mortgage even if they have savings as a huge chuck of the income maybe reduced. You tell a mortgage lender that, they are probably not going to be that comfortable lending you the amount they initially agreed to. 

I don't see the difference if the mortgage is paid by 100% salary or 50% salary and 50% savings. The mortgage is still paid as it would any other way. Yes of course when the baby arrives then there may and i say may be additional costs that could affect affordability. If you are in a 5 year fixed deal are you going to call up your lender and say I've had a baby, no. I've just re-mortgaged with my lender, since i took out my mortgage we had a 2nd baby, they didn't ask me if anything had changed regarding my circumstances just what products were available based on our income they had on file.

housebuyer143

TheJP said:

housebuyer143 said:

TheJP said:

kingstreet said:

This is from a NatWest app completed yesterday;-

"Are there any personal changes that will affect the customer's ability to pay this mortgage e.g. change to job, changes to

income or expenditure, changes to profits & family circumstances?"

I would never advise a pregnant client to answer no to this.

Lenders cannot by law ask if you are pregnant. It all depends on whether the pregnancy will impact the ability to pay the mortgage, the OP has clarified that it wont. We don't know the OPs plans around childcare or if grandparents will offer this. The material change would be when they come to re-mortgage and they then have a financial dependant.

But there will be changes to income, and family circumstances. It will affect the ability to repay the mortgage even if they have savings as a huge chuck of the income maybe reduced. You tell a mortgage lender that, they are probably not going to be that comfortable lending you the amount they initially agreed to. 

I don't see the difference if the mortgage is paid by 100% salary or 50% salary and 50% savings. The mortgage is still paid as it would any other way. Yes of course when the baby arrives then there may and i say may be additional costs that could affect affordability. If you are in a 5 year fixed deal are you going to call up your lender and say I've had a baby, no. I've just re-mortgaged with my lender, since i took out my mortgage we had a 2nd baby, they didn't ask me if anything had changed regarding my circumstances just what products were available based on our income they had on file.

The difference is they haven't got the loan yet and the question is asked and they will be lying by saying no. No matter what way you look at it, they will have a huge change go their financial situation in a few months. It's like knowing you will be made redundant in a few months but don't disclose it because you have savings. 

It definitely matters to a mortgage lender if you plan to pay the mortgage with only 50% of your salary. Otherwise they would ask how much savings you have when you apply.

Once you have the loan they don't ask you these questions because they committed to lending you the money. 

TheJP

housebuyer143 said:

TheJP said:

housebuyer143 said:

TheJP said:

kingstreet said:

This is from a NatWest app completed yesterday;-

"Are there any personal changes that will affect the customer's ability to pay this mortgage e.g. change to job, changes to

income or expenditure, changes to profits & family circumstances?"

I would never advise a pregnant client to answer no to this.

Lenders cannot by law ask if you are pregnant. It all depends on whether the pregnancy will impact the ability to pay the mortgage, the OP has clarified that it wont. We don't know the OPs plans around childcare or if grandparents will offer this. The material change would be when they come to re-mortgage and they then have a financial dependant.

But there will be changes to income, and family circumstances. It will affect the ability to repay the mortgage even if they have savings as a huge chuck of the income maybe reduced. You tell a mortgage lender that, they are probably not going to be that comfortable lending you the amount they initially agreed to. 

I don't see the difference if the mortgage is paid by 100% salary or 50% salary and 50% savings. The mortgage is still paid as it would any other way. Yes of course when the baby arrives then there may and i say may be additional costs that could affect affordability. If you are in a 5 year fixed deal are you going to call up your lender and say I've had a baby, no. I've just re-mortgaged with my lender, since i took out my mortgage we had a 2nd baby, they didn't ask me if anything had changed regarding my circumstances just what products were available based on our income they had on file.

The difference is they haven't got the loan yet and the question is asked and they will be lying by saying no. No matter what way you look at it, they will have a huge change go their financial situation in a few months. It's like knowing you will be made redundant in a few months but don't disclose it because you have savings. 

It definitely matters to a mortgage lender if you plan to pay the mortgage with only 50% of your salary. Otherwise they would ask how much savings you have when you apply.

Once you have the loan they don't ask you these questions because they committed to lending you the money. 

Yes to a degree i agree, but what I'm saying is that the OP will be paying the mortgage likely for 6 months on full salary after the offer is received. It would be different if they were on maternity leave already. They legally don't have to tell the lender they are pregnant, if the lender asks if they have any dependants they don't at this stage. Next time will be different.