Mortgage application during pregnancy 29 weeks...

[whosthis]

We are FTB and found a house we really like. Started the process with First Direct. But when I started reading some online information about the almost automatic discrimination the lenders could hold against pregnant women, I started feeling really nervous.

I am 29 week, and I do plan to work until I couldn't. My arrangement with my employer (full-time/perm job) is to take maternity leave just before the due date and put on the paper for 1 year maternity leave but I would notify them 28 days in advance if I feel ok to be back to work. My company only offers the standard 6 weeks 90% pay, after that it would be the national standard. But we did the calculation, my husband's salary could easily make sure us be able to repay. And we apply for 5 year fixed rate as well, so low risk for increasing repayment for a long time.

What surprised me was when we were applying on phone, FD did ask if there's any long leave foreseen, e.g. parental leave. My husband was on phone and he said no - which is not a lie as he can't take any parental leave himself for his job nature. But I really didn't think nowadays the lender would put the question so straightforward...

Is it possible to say no when they ask me? I don't feel comfortable to lie. But if I say yes, they would absolutely reject our application.

I am also worried that a lot of people say that they would contact the employer to verify the employment status. Would they ask explicitly to my employer if I have maternity or any foreseeable long leave? If they ask, is that appropriate for my HR to release the personal information to a third party?

I don't want to be stressed out and have the baby affected in my tummy! But I can't help feeling so bad and don't know what to do!

Is there anyone can let me know if they would ask my employer this kind of question? Will HR provide information to them?

Thank you very much...

I would avoid mentioning it to be honest. If you intend the return to work, you won't have a problem to make repayments, but from what I have read, mortgage companies will only take your DHs salary into account if you mention that you're going on maternity leave.

Yes, I read so many articles/threads online. They make the case based on the least favorable assumptions.

This article was posted March this year and it indicates the thriving practice in the mortgage market.

www.thisismoney.co.uk/money/mortgageshome/article-2117753/Families-home-buying-dreams-shattered-banks-tough-new-parents.html

If the mortgage would be accepted just in your husband's salary then you have nothing to worry about anyway, as your salary won't matter.

I was a mortgage adviser until recently for a high street bank, and we never contacted a person's employer for anything, although we occasionally requested to see a contract of employment. Obviously I can't speak for any other company, but I've never heard of a lender contacting an employer and would assume its only if salary, permanent role etc couldn't be established any other way :)

Thank you very much, Rockchick1984.

Only by multiplying my husband's salary we won't have enough mortgage to fund the house. It has to be a combination of our salaries. And financially I wouldn't be allowed to be a housewife (my husband doesn't support this idea either) and would no doubt go back to work...

I believe we are wise enough to be responsible borrowers but it might not be trusted by the banks after they had so many bad experiences over years.

Don't necessarily look at it from the bank's perspective, think of it from your own. Yes, the bank can repossess if you don't pay, but ultimately it's you who will lose out if you take a mortgage you can't afford! As long as you are 100% certain that you can afford the repayments, don't mention to them about your pregnancy. FWIW, I took my mortgage while pregnant, with every plan to go back to work full time. Once we calculated how much nursery would cost, it wasn't financially worthwhile me going back but luckily we could afford the bills and mortgage just on DH's salary, I worked at the bank at the time and still didn't tell them I was pregnant :)

Hi, Rockchick1984. I still want to argue that there are people who are sensible enough to know and plan their finance. We wouldn't take a mortgage if not because we do know we can afford. Nobody wants to risk losing their house, especially a new born would be involved.

Banks use "tick boxes" to judge individual cases. This might be the only feasible way for them, but perhaps not a sensible one for a large group of applicants...

We recently moved house when I was 7 months pregnant and got a new mortgage via an independent advisor. Obviously he knew that I was pregnant, but the question didn't come up at all with the mortgage company and he didn't ever suggest that it was something that we needed to disclose as it was clear that we could afford our new mortgage on my maternity pay. The mortgage company did contact my employer to ask for verification of my annual pay (as I work flexible hours) and their calculations seemed to be based on predicted income for that tax year. In this case, I guess that your employers would have to predict your earnings taking SMP into account (luckily for us, my baby was born at the start of April, so I didn't start maternity leave til the lastvweek of the tax year).

I don't know if fix rate would help the lenders to calculate in a more reasonable way or not. I read some post online saying FD uses 8% to calculate the affordability rather than the actual rate.

whosthis plenty of people are sensible enough to plan their finances, only borrow what they can afford to repay and would never voluntarily get into a situation where they risk losing their home. However the bank don't know you as an individual, so how can they decide who they take at their word as being sensible, and who they don't?

The only way to do this would be a return to the archaic way of allowing individual bank managers to make a decision to lend based partially on if your face fits, partially on what they personally know about you, and partially on previous credit worthiness. This would be grossly unfair however on people who do their banking online or by phone, who work all week and can't build a rapport with their bank manager, or who through no fault of their own the manager takes a dislike to!

Surely the most fair way is to base their decisio in a way that means everyone follows the same rules, and the only things which decide if you can borrow would be your income vs expenditure, and your previous credit history?

I am in a very similar situation to yours. We are also FTB and today we got our mortgage offer! I'm now 30+5 weeks pregnant.
We arranged our mortgage through a mortgage broker and he asked me, directly, whether there were any circumstances in the short term that would mean my salary would go down. I told him the truth, that I was going on maternity leave for 10 months, but had savings to cover mortgage payments for that period.
He then got to work and got us a very reasonable mortgage with Abbey. The bank took into account my full salary (rather than SMP) and the amount they are lending us is based on that plus my husband's salary. The broker did tell us that the number of mortgages we could chose from would be less than if I wasn't pregnant, but he still got us a great deal!
I get very anxious if I lie about my circumstances in anything like borrowing or insurances, as this gives the bank a case against you if anything goes wrong.
Good luck with your purchase!

Hi, I too am ftb an my little one is 11 weeks, I'm 4 months into my 12 month maternity leave. We are going through with a purchase at the moment. An there was no getting away with the fact that I was on mat leave!! I too am on basic statutory mat pay, my job is only on fixed term contract also & we have been given a mortgage (thank goodness), they just confirmed all that with my employer an when I was due to return. They didn't take into account my mat pay just my normal annual salary plus my hubby's.
I wouldnt personally lie about being not being pregnant (I'm no good at it anyway) I think hr would have to tell them, I asked my manager not to mention that my contract was fixed term as they didn't like lending to people on fixed term contracts, anyway he said that they have to as they can be held liable and be taken to court by giving false info. Don't know how true that is?