Mortgages and Maternity Leave
Congratulations, you are about to achieve two huge milestones in your life. At Twin Pine Mortgages, we know how stressful it can be to go through the process of buying a house, and we’re sure that this is made even more daunting by the imminent arrival of a newborn. Which is why we have created this blog, we want to put your mind at ease and to tell you everything you need to know about mortgages and maternity leave.
Will You Be Able To Get a Mortgage While on Maternity Leave?
The first question you may have about mortgages if you are currently on, or about to go on, maternity leave is; will you be able to get a mortgage while on maternity leave? The answer put simply, is yes. However, unfortunately, it can be a little more difficult than arranging a normal mortgage. This is because most lenders will consider the fact that your income will reduce significantly while you are on maternity leave, and therefore affordability will be questioned by most lenders.
However, there are various lenders who will also consider your full income as long as you are able to provide certain details from your employer, including; confirmation of your return to work after maternity leave, the date you will be returning and confirmation that your salary will remain at the level it was before maternity leave.
Applying For a Mortgage If You Are Self-Employed and On Maternity Leave
Again, yes it is possible to get a mortgage if you are self-employed and on maternity leave, however, this will depend upon the impact that your leave will have on your business. This means that if your presence is essential to your business operating successfully, then it may be very difficult for you to get a mortgage. However, if you have employees who are able to manage your business as if you were there, then mortgage lenders will be much more likely to accept your application.
Do You Need To Tell the Mortgage Lender That You Are Pregnant?
We would always recommend that you do tell your mortgage lender that you are pregnant, as you will have somebody who is dependent on you and your income. This will change your financial situation and your ability to repay the mortgage you are applying for, and failing to disclose information can lead to further issues related to non-disclosure and fraud. For more information on other things that you need to disclose to your mortgage lender, we recommend reading this helpful article from Money Super Market.
What is the Most You Can Borrow on Maternity Leave?
If you have read through your relevant paragraph and have discovered that you are likely to be accepted for a mortgage, then the next question you are likely to have is what is the most you can borrow on maternity leave? Unfortunately, this is not a simple answer as the maximum loan amount that you will qualify for will differ greatly from lender to lender.
Some lenders will only consider 50% of your income when they calculate your affordability, while others will consider 100%. We recommend doing your homework and researching lenders who will consider 100% of your income as they will offer the highest figure when determining your maximum loan amount. It is also crucial that you consider that there will also be some lenders who will offer you a maximum loan amount of up to 3-4 times your income and others who will offer you 5 times your income.
We hope that this blog has helped to answer your questions on mortgages and maternity leave, however, if you have any other questions please do not hesitate to contact us today for help and advice. Feel free to browse our full list of blogs on our website here.