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    • Boredatwrork
    • By Boredatwrork 10th May 18, 11:53 AM
    • 1,247Posts
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    Boredatwrork
    Applying for a mortgage - childcare
    • #1
    • 10th May 18, 11:53 AM
    Applying for a mortgage - childcare 10th May 18 at 11:53 AM
    We are applying to remortgage with a different lender, they have asked about childcare costs.

    Our parents pay the childcare costs for him in the nursery. The lender advised it would still need to be taken into account their reasoning being the parents may refuse to pay next month, I pointed out I could also crash my car next month and my insurance costs could increase (as ultimately it simply boils down to incoming and outgoing expenses). Some how thats different?

    Anyway, I asked surely they must deal with people in similar scenarios all the time, they advise normally people say the parents look after the kids free (obviously she didn't mention that those parents may or may not be telling the truth.

    So what should I do, be honest and risk a decline even though we are more than eligible on every other aspect and my parents have no intention of not paying, or simply don't tell the lender and claim they are looked after by my parents for free.

    Anyone had this, or can offer advice?
    Last edited by Boredatwrork; 10-05-2018 at 12:13 PM.
Page 1
    • spadoosh
    • By spadoosh 10th May 18, 12:03 PM
    • 5,280 Posts
    • 7,184 Thanks
    spadoosh
    • #2
    • 10th May 18, 12:03 PM
    • #2
    • 10th May 18, 12:03 PM
    Strictly speaking they are looked after by your parents for free. They just choose to pay someone else to look after them.

    Thats the route i think i would go down. Especially if those childcare costs would be disappearing in a few years anyway?
    Don't be angry!
    • Boredatwrork
    • By Boredatwrork 10th May 18, 12:10 PM
    • 1,247 Posts
    • 3,048 Thanks
    Boredatwrork
    • #3
    • 10th May 18, 12:10 PM
    • #3
    • 10th May 18, 12:10 PM
    Strictly speaking they are looked after by your parents for free. They just choose to pay someone else to look after them.

    Thats the route i think i would go down. Especially if those childcare costs would be disappearing in a few years anyway?
    Originally posted by spadoosh
    Thats what I am tempted to say, my only concern is my parents pay the money through a government scheme that allows it tio be tax free, so there is a government account set up (in my name). I am concerned the lender may somehow stumble across that when they do some kind of credit check. In regards to the money being paid, there is literally no trace on this on our bank accounts, pay checks ect, it is completely external.

    The lender did say it might be worth declaring it but then stating that my parents would also look after him if they refuse to offer the financial assistance. Whatever is said, my fear is I don't want a mortgage decline attached to my or my wifes credit or financial history that may influence the future.
    • Neutrinno
    • By Neutrinno 10th May 18, 12:14 PM
    • 195 Posts
    • 91 Thanks
    Neutrinno
    • #4
    • 10th May 18, 12:14 PM
    • #4
    • 10th May 18, 12:14 PM
    We are applying to remortgage with a different lender, they have asked about childcare costs.

    Our parents pay the childcare costs for him in the nursery. The lender advised it would still need to be taken into account their reasoning being the parents may refuse to pay next month, I pointed out I could also crash my car next month and my insurance costs could increase (as ultimately it simply boils down to incoming and outgoing expenses). Some how thats different?

    Anyway, I asked surely they must deal with people in similar scenarios all the time, they advise normally people say the parents look after the kids free.

    So what should I do, be honest and risk a decline even though we are more than eligible on every other aspect and my parents have no intention of not paying, or simply don't tell the lender and claim they are looked after by my parents for free.

    Anyone had this, or can offer advice?
    Originally posted by Boredatwrork
    If you're asking us if you should lie to pass a mortgage application then no we wouldn't agree.

    It's unreasonable to compare to rising insurance costs as this is speculation. You are committed to paying childcare costs going forward if you don't have free care etc.

    Strictly speaking they are looked after by your parents for free. They just choose to pay someone else to look after them.

    Thats the route i think i would go down. Especially if those childcare costs would be disappearing in a few years anyway?
    Originally posted by spadoosh
    They aren't at all. If the children were in the parents care during the day for free, then yes they would be. She hasn't disclosed whether or not her parents would choose to, or be able to look after the children themselves.

    If parents couldn't cover the cost going forward for the childcare then it would be left on the OP's head; who's not to say the OP could struggle to pay the mortgage if they faced unexpected childcare costs?

    Just be honest, I'm sure it can be resolved.
    Last edited by Neutrinno; 10-05-2018 at 12:24 PM.
    I am a Mortgage Broker.

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • FTBNow
    • By FTBNow 10th May 18, 12:18 PM
    • 95 Posts
    • 55 Thanks
    FTBNow
    • #5
    • 10th May 18, 12:18 PM
    • #5
    • 10th May 18, 12:18 PM
    Be honest and risk the decline: a mortgage application is the last thing I would lie on.
    My goals:
    1 x iPhone finance to pay off by July. Current balance: 628.
    4 x NSDs per week
    • spadoosh
    • By spadoosh 10th May 18, 12:49 PM
    • 5,280 Posts
    • 7,184 Thanks
    spadoosh
    • #6
    • 10th May 18, 12:49 PM
    • #6
    • 10th May 18, 12:49 PM
    They aren't at all. If the children were in the parents care during the day for free, then yes they would be. She hasn't disclosed whether or not her parents would choose to, or be able to look after the children themselves.

    If parents couldn't cover the cost going forward for the childcare then it would be left on the OP's head; who's not to say the OP could struggle to pay the mortgage if they faced unexpected childcare costs?

    Just be honest, I'm sure it can be resolved.
    Originally posted by Neutrinno
    Well they tried that and the options given to them seem to be to withhold the whole truth or include it with a note telling a lie.

    Whos not to say the OP could struggle to pay mortgage if they got made redundant tomorrow?

    And if a child becomes ill needing 24hr care, specialist equipment?

    And if the parents (grand) die, the op will have to pay but then on average theyre getting a phat inheritance so no worries.

    The problem with unexpected costs is that, well, theyre unexpected. It could be having to get a taxi because you missed the last bus or it could be having to move a parent in to your home to care for them. So from 2 - 000's. All of this as you know is factored in to mortgage decisions. The risk assessment for the bank. So within those thousands upon thousand of variables amounting to tens if not hundreds of thousands of pounds, i personally think you can easily justify saying that you dont pay for childcare costs (not a lie) and that your parents look after them (not a lie, caring doesnt have to be physical, you can financially look after someone).
    Don't be angry!
    • Neutrinno
    • By Neutrinno 10th May 18, 1:43 PM
    • 195 Posts
    • 91 Thanks
    Neutrinno
    • #7
    • 10th May 18, 1:43 PM
    • #7
    • 10th May 18, 1:43 PM
    Well they tried that and the options given to them seem to be to withhold the whole truth or include it with a note telling a lie.

    Whos not to say the OP could struggle to pay mortgage if they got made redundant tomorrow?

    And if a child becomes ill needing 24hr care, specialist equipment?

    And if the parents (grand) die, the op will have to pay but then on average theyre getting a phat inheritance so no worries.

    The problem with unexpected costs is that, well, theyre unexpected. It could be having to get a taxi because you missed the last bus or it could be having to move a parent in to your home to care for them. So from 2 - 000's. All of this as you know is factored in to mortgage decisions. The risk assessment for the bank. So within those thousands upon thousand of variables amounting to tens if not hundreds of thousands of pounds, i personally think you can easily justify saying that you dont pay for childcare costs (not a lie) and that your parents look after them (not a lie, caring doesnt have to be physical, you can financially look after someone).
    Originally posted by spadoosh
    They have simply been asked to provide an explanation, OP hasn't said they have been declined based on this yet.

    Don't get me wrong, I agree with what you're saying, however your examples are very speculative and unexpected. If someone got made redundant you would imagine they would seek new employment or if parents did pass away then you couldn't just assume they would receive any inheritance.

    My point is, childcare right now is a current commitment until children are no longer at a young age. Parents paying for this cost is obvious that is has to be paid and the parents cant look after them for free. If the parents did one day decide they can't afford to pay anymore then it still needs to be paid, and this would fall with the OP to pay. The mortgage lender's risk is then whether the OP can afford this cost, as currently they aren't able to receive free childcare.

    We could go on all day about every single speculative event that could increase daily costs, but the fact is, this is a current commitment that needs to be factored in.
    Last edited by Neutrinno; 11-05-2018 at 8:46 AM.
    I am a Mortgage Broker.

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Boredatwrork
    • By Boredatwrork 10th May 18, 1:47 PM
    • 1,247 Posts
    • 3,048 Thanks
    Boredatwrork
    • #8
    • 10th May 18, 1:47 PM
    • #8
    • 10th May 18, 1:47 PM
    If you're asking us if you should lie to pass a mortgage application then no we wouldn't agree.
    Originally posted by Neutrinno
    In fairness I didn't, I said those appear to be my only options, I was hoping people with experience maybe able to guide me or suggest something

    It's unreasonable to compare to rising insurance costs as this is speculation. You are committed to paying childcare costs going forward if you don't have free care etc.
    Originally posted by Neutrinno
    That was my point, surely most bills are speculation as are salaries. We are not commited to childcare, we can stop it anytime we want, my parents (if needed) would look after him for free, we all just wanted him to go to nursery purely for his development.


    Just be honest, I'm sure it can be resolved.
    Originally posted by Neutrinno
    I most likely will, it just seems crazy that had I said they would look after them for free...no issue, but because they also pay for some part time nursery it is questioned.
    • amnblog
    • By amnblog 10th May 18, 9:33 PM
    • 10,646 Posts
    • 4,212 Thanks
    amnblog
    • #9
    • 10th May 18, 9:33 PM
    • #9
    • 10th May 18, 9:33 PM
    Yes. It should be declared.

    If it adversely affects affordability to preclude the deal you need, use a Lender that does not factor it in.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Thrugelmir
    • By Thrugelmir 10th May 18, 9:42 PM
    • 59,245 Posts
    • 52,616 Thanks
    Thrugelmir
    Bottom line is that lenders underwrite mortgage business at the macro level not the micro. Therefore there will be internally set criteria (at board level) which will be applied to every applicant. Irrespective of their individual circumstances.

    Lenders cannot possibly investigate the accuracy of every application made. Coupled with which people have the propensity to lie if given the opportunity to benefit themselves.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Mortgage_Adviser
    • By Mortgage_Adviser 11th May 18, 2:49 PM
    • 155 Posts
    • 53 Thanks
    Mortgage_Adviser
    OP, the different lenders look differently at the childcare costs. Some lenders even completely ignore them. If you are unsure how a particular lender would look at your individual circumstances, here comes the benefit of using a broker rather than going on your own.
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