Mortgage offer and 30 free hours childcare

[Sunrays22]

Hello,

Bit of a niche one probably but I wondered if anyone else had experience of this...

We are in the process of trying to get a mortgage offer for a first home and we are due to receive our childcare hours on 1st January which cut our costs down by a third. We've had mortgage in principle agreements based upon this new childcare amount however we may need to arrange a mortgage sooner than Jan 1st as we are wanting to reserve a plot on a new development.

After speaking to a mortgage broker, they're fairly sure that lenders will only offer based on our current childcare costs which are obviously a lot higher. Has anyone had any experience of securing a mortgage in advance of childcare costs decreasing? Normally I would say it's obviously no but we are only about 7 weeks from these childcare costs coming into effect and the mortgage wouldn't start until the new build is completed in April 2024.

They only base it on your current circumstances at time of applying I believe. I also work for a large financial services company, I'm a part qualified adviser. We were changing to a new nursery just after applying which was 1/5 of the cost of the one we were using and DH was due a massive pay rise in September. But as we locked in a new deal in April they wouldn't take any of this into consideration.
As the tax free childcare hasn't come into affect I don't think they'd take it into account. Maybe call a lender and check.
Annoying as shit but we didn't want to wait to fix a deal and thank god we didn't.

Thanks for your help! That's so annoying, and frustrating as well when it's only a matter of weeks!! We are speaking with our broker again tomorrow to see what they can do 😬

We were told Santander don't, and potentially Halifax. Apparently, the mortgage adviser can give the bank additional information explaining that this expense will end imminently. Some mortgage advisers are a lot more inflexible than others though. Our first one said it was fine. For example if you were moving to nearer your parents and they were going to take over childcare, it would no longer be a recurring monthly payment, so it wouldn't be reasonable to take it into account.

Our most recent one was a bit of rigid about it though and flatly refused to take this out of the equation until the change was made. Unfortunately, the first one was attached to the EA we were buying through at the time the chain collapsed.

It's so silly that they take this one-off snapshot of your finances that are supposed to be representative of your whole life for the next 25-40 years. Like if we'd taken out a mortgage pre-kids obviously we wouldn't have needed to declare childcare, and would have just had to cut back on other things to make it all work (which it would).

My best advice is to see if you could skip a month of childcare, pay cash or from a savings account or similar, so you can have it not on your bank statement this coming month.

Thanks for this advice it's really helpful! I think I'm most frustrated as if we go through with reserving a plot imminently, we would be expected to meet the developers exchange deadline which would be around 24th Dec - about a week before our free childcare hours come into effect on 1st Jan 🤣😅

So we were in a similar position, we told them we were going to have my mum look after the kids and drop nursery once we moved so they voided the cost of nursery off our expenses. This was our ‘official’ plan 😂 My mum was obviously aware and agreed to play along but it was NEVER the actual plan.
Ultimately they take you at your word, they aren’t there to scrutinise if what you’re telling them is the truth or not. Sometimes it’s just a lot easier to side step the issue altogether.

We’ve been here over a year now and managed just fine paying everything, including nursery.

If you have any family member willing to smile and nod (they never checked with or even spoke to my mum and there was mumblings of needing a letter from her but it never actually happened) I’d highly recommend doing that 👍🏻

It’s (partially) funded childcare not free so take that into account when working out your figures.

Thanks, yes we know ☺️ we've got an official 'statement' from our nursery saying how much it will cost from 1st Jan so I was hoping that may be enough for lenders to go off!

We're in the same position, 30 hours from Jan eliminating nursery fees from our budget. Our broker just provided this information to our lender (TSB) and it wasn't included as far as I'm aware. They also didn't include car loan payments that we have as far as I'm aware as the total loan is going to be paid off with the proceeds of the house sale.

No one even checked anything further than me just explaining for ours either. I've very much not given a shit about the mortgage going through though as its been such a minor thing compared to the rest of the shit show I have occurring right now 😂. I feel like our advisor has wanted to give me a kick up the bum that it is important obviously but blah.

We pay a month in advance, so will pay December's next week, can you do similar so by the time you apply for the mortgage you don't actually have those costs?