Buy home before or after second baby?!

[Zippyette]

Hi, I would like some advice on whether we should take a risk or not...I know there are no guarantees but it would be a calculated risk!

So my husband and I have enough money saved for a 10% deposit and the costs of buying a three bed house. We currently rent a two bed for us and our two year old. The baby is due in October.

My husband is on a permanent contract and my job is fixed term till the end of August which is unlikely to be renewed as it's maternity cover and she's been off having her second baby.

We both would really like the security of owning our own home for our family, having already had to move twice since our first has been born.

Buying a three bed house means the mortgage would cost £162 a month more than renting our two bed at the moment. I have done the financial calculations based on our current spending over the last year and the savings we would have left minus the house buying costs and have worked out that we would have enough money for me to take 9 months of maternity leave (maternity allowance) plus savings to cover costs for 18 months should I not find a job straight after the end of maternity leave.

So do we take the risk of buying a house based on our current income knowing that I won't have a job to go back to after maternity leave? I feel that 18 months is a reasonable cushion to take that risk. It took me 8 months to find another job after my last lot of maternity leave ended.

My concern is that if we don't take the risk then our income will be even less after the second baby with two lots of childcare and so we are less likely to be loaned the money. We know we can afford the monthly repayments it's just the combination of our two salaries minus childcare that I think will work against us, in terms of being lent the money. But maybe I'm wrong?

What would you do?!

Thanks

You'd need to disclose the house value and your salaries to get a better idea but first impression is that if you wait until DC2 comes along and you aren't working you have virtually no chance of getting a mortgage.

If you applied now, knowing you won't be working in a few months time, that would be fraud as you are supposed to disclose changes to your circumstances but I'm sure plenty of people do it as soon as they discover they are pregnant and make out they didn't know

Probably most relevant though is the fact that mortgage lending is based on what a lender thinks you can afford, not what you think you can afford.

It sounds like your budget is pretty stretched even with one child so 2 will further reduce your affordability.

Try putting your details into some online mortgage calculators to see if you are in the right ball park for being able to borrow what you need.

Thanks for your response bearbehind.
It's interesting you say that I sound stretched at the moment, what did you base your observations on?
I spoke to a mortgage broker and they agreed that we would likely be able to borrow £190,000 with a £21,000 deposit based on a joint salary of £43,000.
Will have a look at some mortgage calculators and see what they come up with.
Thanks

By stretched I just meant you have been looking at your expenses and working out how long your savings will last on your maternity etc (as most people have to)

Getting a mortgage based on 2 people's salary when you know only one of you will be earning soon is a very risky strategy (mortgage fraud aside) but getting a mortgage with 2 dependants and only 1 salary might be a no go as well.

Factor in when you have your second child and when/if you go back to work and on reduced hours with let's say a 2% interest rate on mortgage rates in the future would you be ok? Ideally you would want to buy a house based on your 3x partners salary then your pretty comfortable

Thanks for your comments.

Bearbehind- I know it's risky, but does having an 18 month cushion make it less risky?

Shabbycaddy- when you say 2% mortgage do you mean an increase? I would be looking for a five year fixed term so I knew what my repayments would be. And it's interesting you say 3x salary as the mortgage broker said 5, but is that based on a joint income?