Pregnancy and Looking for a mortgage

jedentag

jedentag

Registered User
Messages
25
Hi There,

TL/DR - does anyone know the impact of someone being pregnant and a new dependant has on the mortgage offer?

Looking for some impartial advice.

We are mortgage approved and have an apartment to sell before we can trade up, we're currently renting with tenants in the mortgaged apartment.

My partner is expecting and due in 2 months so will be off work in a month.

I was told not to volunteer that my partner was expecting during mortgage process as that's a negative to the amount they are prepared to offer for AIP.

We have since found a property and put a fully refundable booking deposit down more in hope than expectation.

We now have contracts issued and 3 weeks (approx), before we have to sign and commit the 10% deposit with penalties if we don't go ahead.

If we could sell the apartment and use savings/mortgage we could buy the property. Realistically that's going to take 3 months and by then she won't have had any wages coming in and will have to be honest about the situation to the bank when they ask for last 2 payslips.

TL/DR - does anyone know the impact of someone being pregnant and a new dependant has on a revised mortgage offer?
 
jedentag said:
We are mortgage approved and have an apartment to sell before we can trade up, we're currently renting with tenants in the mortgaged apartment.
Click to expand...
jedentag said:
We have since found a property and put a fully refundable booking deposit down more in hope than expectation.

We now have contracts issued and 3 weeks (approx), before we have to sign and commit the 10% deposit with penalties if we don't go ahead.
Click to expand...
Why have you done this? Do you not think that you're treating the vendor extremely poorly? They would be pulling their hair out if they read this thread.
 
noelÓm said:
you're treating the vendor extremely poorly
Click to expand...
Get a grip - good faith deposit isn't unusual.

Pain in the wotsit when a deal falls through, but them's the breaks.

OP - I suspect you are right & your mortgage won't be approved if you needed the two full salaries for it.

Fall back & re-group would be my advice.
 
I was on maternity leave when we got our mortgage.... Depends on how the numbers stack up but we had to show payslips (I was fully paid my usual salary less maternity benefit) and a letter showing I was expected back in work on x date. Don't forget that you will now have a dependent so that will factor i to affordability calcs. Only way you will know is if you ask if you can still proceed with plans. Make sure you are well aware of your future childcare costs or loss of one salary as this should also be on your own mind for repayment ability not just the banks.
 
DannyBoyD said:
Get a grip - good faith deposit isn't unusual.

Pain in the wotsit when a deal falls through, but them's the breaks.
Click to expand...
I'd agree with @noelÓm here, these are real people that the OP is messing about for no good reason. We don't know their circumstances but this will cause them grief and money.
 
jedentag said:
does anyone know the impact of someone being pregnant and a new dependant has on the mortgage offer?
Click to expand...
When you attempt to draw down a mortgage, the lender will seek up to date payslips and financial details to confirm that your circumstances have not changed from those the approval was based on. If your partner is off work at that time, then the draw down will very likely be refused and you will have to seek approval all over again.

Lenders adjust the affordability calculations to account for the cost of supporting any dependent. How that affects your chances all depends on how close to the lending limits you are.
 
Leo said:
When you attempt to draw down a mortgage, the lender will seek up to date payslips and financial details to confirm that your circumstances have not changed from those the approval was based on. If your partner is off work at that time, then the draw down will very likely be refused and you will have to seek approval all over again.

Lenders adjust the affordability calculations to account for the cost of supporting any dependent. How that affects your chances all depends on how close to the lending limits you are.
Click to expand...

Is that true only if there is a timelapse greater than 3 months between approval and drawdown?

In my experience if your wife is on paid maternity leave and has a letter from employer stating when she will be back to work then it is fine. If your partner is not returning to work then they will assess based on the one income.

I have gotten mortgage approval when my wife was pregnant and drew down when she was on paternity leave after the provision of a return to work date letter.
 
DublinHead54 said:
Is that true only if there is a timelapse greater than 3 months between approval and drawdown?
Click to expand...
Lenders' practices may vary, but they will want to know about any changes in circumstances. They will all adjust the affordability calculations once they are aware of dependants.
 
noelÓm said:
Why have you done this? Do you not think that you're treating the vendor extremely poorly? They would be pulling their hair out if they read this thread.
Click to expand...
I’m going to shock you here when I reveal that my partner and unborn child’s housing and future are my priority over ‘unnamed vendor’ and their hair. I’ve entered into this in good faith.
NoRegretsCoyote said:
Will she not get any maternity pay above statutory?
Click to expand...
Alas, no.
 
jedentag said:
I’m going to shock you here when I reveal that my partner and unborn child’s housing and future are my priority over ‘unnamed vendor’ and their hair. I’ve entered into this in good faith.
Click to expand...
Then you also need to consider how this deal falling apart will affect them. It's unlikely that the vendor of the place you have identified will be happy to wait months. Are you OK to walk away from that 10% and start looking for another property? You really don't need to introduce that kind of stress along with a newborn .
 
DublinHead54 said:
Is that true only if there is a timelapse greater than 3 months between approval and drawdown?

In my experience if your wife is on paid maternity leave and has a letter from employer stating when she will be back to work then it is fine. If your partner is not returning to work then they will assess based on the one income.

I have gotten mortgage approval when my wife was pregnant and drew down when she was on paternity leave after the provision of a return to work date letter.
Click to expand...
Nice one - the letter from her employer shouldn't be a problem to get.
 
Leo said:
Then you also need to consider how this deal falling apart will affect them. It's unlikely that the vendor of the place you have identified will be happy to wait months. Are you OK to walk away from that 10% and start looking for another property? You really don't need to introduce that kind of stress along with a newborn .
Click to expand...
Why walk 'walk away from that 10%' a booking deposit is fully refundable, a contract deposit is usually subject to mortgage.
 
cremeegg said:
Why walk 'walk away from that 10%' a booking deposit is fully refundable, a contract deposit is usually subject to mortgage.
Click to expand...
In most cases yes, but the OP said they would be required to commit the 10% desposit 'with penalties' in the contract if they don't complete. That suggests a new build as developers generally don't permit subject to sale or subject to finance clauses, but the OP didn't specify.
 
Leo said:
I'd agree with @noelÓm here, these are real people that the OP is messing about for no good reason. We don't know their circumstances but this will cause them grief and money.
Click to expand...
Who are you talking about that will suffer grief and loss of money, the sellers? It's a new build and it's not ready to move into for 3 or 4 months.
 
jedentag said:
Who are you talking about that will suffer grief and loss of money, the sellers? It's a new build and it's not ready to move into for 3 or 4 months.
Click to expand...
It would have been great if you added that detail at the start. That changes things considerably as full draw down won't happen until later, by which time your wife will be off work and your financial position will have changed requiring new approval.

Ultimately, you should not sign that contract in less than 3 weeks unless you have confirmation in writing from the bank that they are satisfied to lend based on the circumstances as they will be at time of draw down. They are going to check, no point trying to hide it.
 
jedentag said:
I was told not to volunteer that my partner was expecting during mortgage process as that's a negative to the amount they are prepared to offer for AIP.
Click to expand...
This is bad advice particularly in relation to a new build. You will not be negatively impacted once you provide a letter from her employer stating her return date to the same position and salary. Not exactly the same but we switched our mortgage while my spouse was on the unpaid part of her maternity leave with no problems at all. We were however comfortably inside LTI/LTV limits

What might be a problem is if you have already maxed out at 3.5/4x loan to income rules for your AIP. A dependent has to be factored into your affordability. This really depends on your lifestyle and whether your current rent/mortgage plus savings can easily cover the costs associated with childcare.

jedentag said:
It's a new build and it's not ready to move into for 3 or 4 months
Click to expand...
3/4 months...possibly 6-8 months. Builder's schedules generally get longer. Your existing AIP could expire and you will need a new or extended AIP. You will have to provide up to date financials at some point either for AIP or drawdown. You really don't want to be in a position where you have signed a contract and you no longer have AIP. There will be penalties for not fulfilling your contractual obligations

With all of the above, you know that the baby will arrive before drawdown and you won't be able to provide the same financial information putting your AIP at risk. You really need to be proactive about this and reach out to the lender, get the return to work letter from your spouse's employer and get the AIP extended to 6 months from today.

Also, it would help if you provided some of the relevant info in terms of salaries, property price, LTV/LTI, mortgage term, ages(approx) etc. Without that detail it is hard to give a good steer on the likely outcome
 
You must log in or register to reply here.
Back
Top