To not tell mortgage advisor/broker that I had a baby?

[SeparateVaccines21]

So my situation is slightly complicated.

We first started looking for a house almost 2 years ago. We decided we weren’t paying the wild prices houses were going for during lockdown so we’ve managed to save up about a 20% deposit now. We had an AIP done and just kept renewing it then the guy moved companies and we followed him and he done us a new one about 6 months ago when it looked like a house we wanted was coming up for sale. I’ve built up a good relationship with him and he’s actually related to one of my good friends.

I got pregnant earlier this year and didn’t tell him as I thought we would have a house before the baby came. No such luck.

Baby came early and is now almost 10 weeks old. The house we want is going on the market in 2 weeks and I don’t want anything to delay the sale.

I haven’t spoken to the mortgage advisor over the phone in a while so the subject has never come up. But I’m unsure if I should tell him that I did indeed have a child?

For context, my partner is the main applicant as I am a student. I get some disability benefits that were taken into account for the AIP but it’s my partners earnings that met the affordability criteria.

As I’m studying, I’m at home with the baby so no childcare costs. I have the exact same money coming in (more if you count child benefit) and I’m breastfeeding so no formula costs. I’m in my last year of the course so imagine I’ll have a full time job this time next year and affordability won’t be a problem at all. Family will be doing childcare when the time comes as well.

My question is, do I tell him when I speak to him next week as I’ve asked him to get everything in place for this house so nothing delays it at all? Or just keep quiet since it won’t really affect our ability to pay the mortgage?

Were there any questions in the mortgage application, for which the answer has now changed? Did it specifically ask about children?

I can’t actually remember, it was that long ago tbh. But I imagine there would be questions about dependents on any application, no?

I must add, I’ve not actually applied for child benefit yet as baby was only registered last week so that won’t be going into my bank for a while so won’t show on statements yet.

Also, forgot to add that the relevance of him being related to my friend is because they mentioned to him that I was pregnant but the next time I spoke to him he didn’t bring it up so I wasn’t sure if it mattered or not?

Would I inform them? If my repayments were borderline and it meant I they would withdraw the mortgage, I wouldn't tell them. You could have drawn down your mortgage three months ago and be pregnant now and be in the same situation financially.
But just keep in mind that you need to adjust your repayment affordability taking into account your child's expenses. Otherwise you may end up with a mortgage you can't afford and all the grief that brings with it.

If you submit a full mortgage application with dependents listed as zero then you will have committed fraud.

Be upfront, the impact on what you can borrow won't be that great if you have no childcare costs.

My disability payments would cover the mortgage and council tax alone, without taking my partners earnings into account so there’s definitely no question about affording the repayments. We’re not in an expensive area and we’re trying to buy a cheap ex-council property.

But won't you need the disability payments to pay for the extra costs incurred by your disability ?

An agreement in principle is just that, until you actually start to proceed with a specific house then the bank won't carry out the harder affordability checks such as looking at bank statements etc. Your broker is on your side, he might be able to find a different package if you tell him now, it will be much harder once he has applied for the mortgage and you have been turned down.

Tell him. Your broker is there to help you, but if you’re dishonest with him he can’t do that. If you get a mortgage on the basis of leaving out relevant information it could cause you issues down the line.

AIPs aren’t very thorough, when you then apply after finding a property you will need to declare the number of dependents.

Why do you want to commit fraud?

Yeah the AIP isn't the end of it. You will have to do another, more detailed application to actually get the money. Lenders can also say no at that stage so be warned, this happened to us and it was horribly stressful.

I'm sorry you haven't been able to move before baby comes. Of course you will have to answer truthfully when you get to the detailed application. It's fraud otherwise which will put you at risk.

Make sure your name is on the mortgage though, don't be manipulated into letting DP have only his name as if that's going to solve anything. You need to be protected financially now that you're a mother. Congrats

Applying in principal is different to the actual mortgage application. You will be asked when you apply in full if you have dependants. Unless you’re willing to commit fraud, then you will have to be truthful. If your partner is the main applicant, and you have no income now anyway (all information on which the agreement in principal was based) then nothing else has changed and it will all be the same anyway, surely? I know you’re excited about your first home, and want it all to go smoothly, but lying isn’t the answer. Your broker is there to help you and it sounds like want you want to borrow is affordable so it should be no problem. You might not even get this house anyway! You could get beaten by another buyer, so it’s really important that you have a solid footing to move forward with ANY purchase. Don’t sweat it: sounds like you’ve done your sums and you’ll be fine! Don’t lie - it’s illegal and stressful.

You will also be asked about dependants for the AIP. It’s basic affordability information. It doesn’t sound like you’ll have an issue so I’d declare it. Otherwise you could run into delays later if they suspect anything. Unlikely without childcare costs but if they ask for bank statements they may notice something.

If you are asked to provide bank statements and they show child benefit then the lender is going to know that you have a child and will add them as a dependent on the application

An agreement in principle isn’t a detailed thorough check is it? I think when you’ve actually gone sake agreed on the house, agreed a purchase price etc and are looking to complete, you will have a MUCH more thorough call with the bank itself not just your agent to go through all of the affordability checks. They will ask you about dependents.

Also - are you personally putting in 20% mortgage lump sum? Are you and your partner married? Will your name be going on the actually deeds of the house? You say the mortgage will just be in your partners name. So I assume won’t be on the deeds as lenders usually don’t allow this. How are you protecting your money, have you had legal advice YOURSELF as to protecting the cash you’re investing in the house your partner will own, and also how are you guaranteeing you have security of tenure in the house if you don’t have any legal rights to it?

Things you REALLY need to think about to future proof for yourself in case the worst happens

@redhelenb Not all disabilities cost money. i get disability benefit. i mainly have ptsd, fibro, hypermobility and irlen syndrome. none of them cost me much money, maybe some extra expensive footwear and some heat packs / extra heating and stuff but all in all i use the money because i cant work at the moment when i get bad flare ups.

Your question is shall I commit fraud or not, the answer is of course you shouldn't.

The AIP doesn’t guarantee a mortgage (I know lots of people get one and then be denied the full
Mortgage atm) so you’ll still need to do the full
Mortgage application. I wouldn’t lie on that.

I also don’t see why you would lie? If it’s not based on your income and your not losing any money to child care so the overall financial situation is the same then it shouldn’t matter if you’ve had a baby or not. I can only see it being an issue if childcare would reduce your affordability criteria or if your income was also included and maternity had effected your pay significantly etc

Along the lines others have said

You MUST give full and complete information at full application stage - anything other than that is fraud.

Your income hasn’t altered and you weren’t the main wage earner, but you do now jointly have a dependent so the ‘free cash’ the mortgage company will need to see is higher, so it depends how much you were vs the max loan amount they suggest. You may now find the max loan amount is lower.

I’d get a refreshed AIP declaring your new circumstances. Anything other than that might lead to mega stress after you’ve put an offer in which no one needs!

An underwriter could ask questions about whether you have a child if they see transactions on your bank statements which could indicate that you do.

I’m going to declare that I’ve had the baby. I don’t want anything to hold up this sale, we’ve waited almost a year for this specific house to come on the market.

I had just read numerous threads on here stating that peoples affordability had been reduced massively by declaring children, even ones that weren’t born yet 🤷🏽‍♀️ So it made me think we wouldn’t get half as much if we declared a dependent even if there’s no costs.

Thank you everyone.

It would likely affect your affordability so be prepared for that. Is the house you are hoping to buy at the top of your limit? Declare dependents as others have said otherwise would be fraud. Also the childcare situation (relying on family) may change in the future and a mortgage is a long term commitment so that is why it may affect the amount.

I wouldn't worry too much OP. Yes dependents are considered for affordability purposes but the impact per child is minimal. We had 2 children when we got our foot mortgage and the amount they were prepared to lend us based on income didn't actually change at all. Your child benefit is also calculated as income for mortgage applications

*first

It didnt seem to effect us, we have two small children and were offered just over 4.5x our income which I think is normal. We dont have any childcare costs which was probably a big factor, it sounds like you don't either. They'll want at least 3 months bank statements and wage slips when they do the actual application