Buying a new house while on maternity leave

[Cookie51]

Nightmare - we've accepted an offer on our house and found a new house to buy slightly cheaper than the old house. When we enquired (twice) about the process of transferring our mortgage to a new property, the mortgage company told us it'd be v straightforward, once the property is valued it just transfers over and we might have to pay a small redemption fee if the borrowing is a little less.
NOW they are saying they want to reassess whether we can afford the mortgage, which we've had no problems paying for the past 9 months on one income, since baby 2 was born. Based on one income we'd be able to borrow a lot less. I'll be going back to work as soon as the older one goes to school in September but obviously that doesn't help us now.
Anyone else come across this problem and how did you get round it?

[minipie]

Have a look at this thread

seems various women have got around this by citing equality legislation etc and the bank has backed down.

good luck.

[Cookie51]

Thx - that sounds like a plan!!

[Cookie51]

Looked at the old thread, most of these ladies are going back to their previous job. I took redundancy because I wanted 1 year 3 months off. But they don't seem to take into consideration the fact we've paid our mortgage for 5 years no problem including the last 9 months on one income and my last maternity period as well. I could understand it if it was a new application or we wanted to borrow more!!

[minipie]

If you've taken redundancy then how are you going back to work in September? Have you got a new job? In that case you're not really on maternity leave, you are between jobs iyswim.

If that is right then I don't think citing equality laws is going to help you - you're not really any different from a man who is between jobs. Your best bet would be to look lenders who focus on affordability rather than strict salary multiples - I think Halifax has that reputation but a broker could tell you better than me. Try London & Country brokers, they are free and independent.

[thomasbodley]

Are you currently on a bloody brilliant rate?

My guess is that the mortgage company are being difficult about porting your current product because they want to sign you up to a more profitable product (profitable for them, not you). If you no longer qualify for the loan on the earnings multiple, they have you over a barrel: you can either take their more expensive SVR, or bugger off (and probably have to obtain an even more expensive mortgage product elsewhere).

So one option is simply to accept their more expensive product.

Another option is to move into rented if you want to keep your current buyers, and then apply for a new mortgage once you've returned to work and got through your probation period.

Or you take your house off the market and stay put until you've got your financial ducks lined up again.

I'd have suggested you ask the buyers for a delayed completion until you return to work, but as you've taken redundancy rather than maternity leave, there are too many uncertainties to make that work.

[Cookie51]

No of course I'm not on maternity leave, that was more for the benefit of others reading this who might be in a similar situation.

Didn't mention we've relocated so returning to my old job wasn't an option anyway. In a sense I'm the same as a man who's between jobs, except that I've planned over the last 5/6 years (during which time we've had our mortgage with this bank) to have two periods of maternity leave, we've budgeted for it and not had any holidays. I've got a good career track record and professional qualifications so work shouldn't be a problem.

As we didn't borrow the full amount we could on both salaries originally, we might still be able to buy something - but what frustrates me is that we've kept our side of the deal and paid our mortgage for 5 years. When we changed to a new product at the end of the initial tie-in, we checked and checked again that we could transfer the agreement to a new property, as we know we were likely to move!!! NOT ONCE DID THEY MENTION BEING REASSESSED either then or recently.

This is causing us totally unnecessary stress until we have a meeting next week to find out how much they will lend us (couldn't face trying to sort it out with faceless people over the phone). Oh, and I suppose they will charge us extra for repaying what we haven't chosen to repay?!

[mumtorobbie]

You could run into trouble. I'm on mat leave and plan to return to work next year BUT I was on a fixed term contract so will have to look for another job.

We are in the process of moving and needed to borrow £30k extra and the new mortgage is based on my dh's earnings only.

We have had to jump through some ridiculous hoops to get such a good deal including combing our bank accounts with a fine toothcomb. We had to clear ALL credit cards too.

[Cookie51]

Hmmmm, we've had loads of extra expenses due to moving, renting etc so it's not looking good.

Wouldn't have moved before finding a job but for the school application form that had to be in mid Jan - why that whole process takes 9 months I don't know?!!

thomasbodley - that's harsh!!!