Mortgage application at 29 week!

[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 did 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 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...

They might not reject it, ours was done on husbands salary alone as I was self employed at the time.

DO NOT LIE as that is fraud, and somewhat frowned upon.

You mustn't lie. If they discover your applicant was fraudulent then worst case is that they demand repayment, even after you've bought the house. Then you'd have to sell or find a lender willing to offer you a mortgage knowing your last application was fraudulent.

I had the same situation. My employer had to write to confirm my right to turn after maternity (even though that's a legal right). I had to write to say I'd return after six months. They asked about childcare costs, i said my mother would care for the baby for free. I actually stayed off longer but we had plenty in savings. They won't take those into account though I case you spend it.

They just have to have a fully auitable trail that they assessed the affordability of the loan.

I wouldn't lie but can you apply for it solely on DH's salary if his earnings cover it? We did this when we moved as I didn't have a job, mortgage is in DH name without mine as putting me on it would have meant I was counted as a dependent.

Solely with his salary x 4 it won't be enough to fund the house...

If I have know they openly discriminate (by asking questions so straightforward), I perhaps wouldn't have chosen them even they offer a good rate.

They all do. It's not about discrimination in the anti-woman sense. The rules on affordability have been tightened in recent years so they have to show auditable evidence that you can afford the mortgage even with the drop in income and greater expense that having kids brings. In the long run they are protecting their investment in your home and your ability to live their while servicing the debt.

Hi HappyCamel, I understand their point of view. But it's just unfair for people who are capable to determine themselves on the responsibility they would take. We are old enough to have some wisdom that our life depends on ourselves only. So any judgement and any decision made, we would be carrying the consequence.

We already planned to overpay as much as we could from the very beginning.

It's only unfair for people like us.

I don't know the answers to your specific queries but wanted to say I have got a new mortgage whilst on maternity leave - they didn't seem very interested in my ml income, just what I earned when at work.

We remortgaged when I was on maternity leave - they wanted evidence that I was earning x amount 'normally' & would be returning to work (which was slightly ridiculous given we were reducing the LTV and our monthly outgoings by remortgaging, but heh...).

OP, Have you seen a financial advisor? They might be able to advise on alternate companies or lenders that are more likely to lend at this time. It might be worth going for a slightly higher rate with the view to remortgaging to get a lower rate once you've returned to work.

Nationwide definitely aren't bothered about this kind of thing. I've applied successfully for mortgages with them whilst on mat leave, and whilst about to go on mat leave in the last year. If you search for other threads about this I'm sure I read that most banks don't bother... I would speak to a mortgage adviser. You don't want to lie, you want someone to sell you the right product.

I agree and as you can see above I had the same issues, I'm an accountant but they still wouldn't take all our savings and my budgeting skills in to account. Blame the FSA and all the people who over-borrowed and are now in arrears or defaulting.

We had to remortgage once when I was 38 weeks pregnant. We went with a local building society mainly because we had a up front and frank discussion with them, and they took a decision based on our circumstances (we can afford the mortgage on my salary alone but not on dh's, but I intended to return to work after 3 months). We had an ISA with the same building society which probably helped, it was only a 2 year product, and we weren't looking to extend our borrowing.

You have to be up front with them. And while local building societies don't always have the best rates, they only usually offer one or two mortgages but the personal touch can be so much easier than dealing with the one-size fits all stance that is (understandably) taken by the bigger banks etc..

My advice is to go to an IFA and ask them. They are on sticky ground while you are pregnant as you can prove your income. It is pure discrimination as far as I can see. Anyone can leave their job, male or female.

We moved while I was on mat leave. DH was in a crappy job with a company liable to go bust at any point. They gave him 5x his salary (as we had big deposit). Refused to consider my bigger salary at all as on Mat leave. We were lucky that they gave us enough. FWIW DH left crappy job as soon as the ink was dry on the mortgage offer so he could be self employed and earn more with more security. Bloody ridiculous.

We had to have one of those meetings with estate agents to verify finance and their finance person was interested in ku salary. She said different banks had different criteria.

You may think it is unfair that you are not allowed to decide yourself whether you can afford it or not, but remember that that is exactly why the world is in this current financial mess. People over-borrowing and not being able to repay, because the banks were too generous and essentially believed anyone who claimed they could afford the mortgage. So the banks are right to be much, much stricter than they used to be.

Also, as some people have pointed out, you absolutely have to see a mortgage advisor who will be an expert on different banks' lending criteria. The advisor will be able to point you to a suitable lender. Otherwise you might apply and get rejected, which may be negative for your credit scoring. Under no circumstances lie to the lender or you could get in to all sorts of trouble.

I am currently 28 weeks pregnant and we moved into our first purchased home two weeks ago.

As everything is basically done online / over phone / via post these days we were never asked any questions regarding pregnancy / parental leave etc, and we never said anything.

However someone I know who is a mortgage advisor did tell us to keep it quiet as they may not have approved it knowing I would soon be cutting my wage down massively to stay at home with our baby for a while.

So pleased we bought though :)

Good luck

xxxx

Annath it is not in crisis because sensible people were allowed to decide. It is patronising beyond belief that a woman would leave work and therefore not be able to pay mortgage. Self cert 110% mortgages plus mindblowingly ridiculous lending in the US and banks investing in this supposedly for a fast buck caused the crisis.

I agree with you, brettgirl2. I wouldn't be convinced that pregnant women are one of the major reason of loan defults. On the other hand, will people knowing they might lose the house refuse to go back work after giving birth? To arbitrarily "decide" these moms wouldn't go back work and therefore the mortgage would default is very odd logic.

Anyway, we will wait to see what FD ask in details and if it can't go through, we will find a second lender...

They asked your husband if he was planning on taking a long stretch of leave, how is that discrimination against women?

There are many reasons why the lending and borrowing that led to the financial crisis was wreckless and like it or not, people borrowing the maximum they possibly could on two incomes failing to take any account of the impact of a cut in income due to maternity leave and childcare costs will have been one of the many factors in the mix. I know lots of people who seem to be surprised when this has happened to them, including those who were actively trying for a baby when they bought their house.

I think First Direct have a reputation for being quite cautious lenders, and a low rate will generally only be on offer to those that fit a very low risk profile, so it is likely that you will have more luck elsewhere.

Ahopskipandafurry one yes, agreed but refusing to offer any service to someone on mat leave even if they can afford it is discrimination.

Not if they would also refuse to lend to a man who was on a reduced income for any extended period of time for whatever reason, and it sounds like this is the case. Besides just because you think you can afford a mortgage doesn't mean that a bank automatically has an obligation to lend you the money, no matter what your circumstances.

When it's all about ticking boxes, there's no such a thing called "fairness" to individual cases.

I disagree it is discrimination in my opinion.

I remortgaged while on mat leave and their adviser told me I would have to return to work before they would consider our application. A letter from work stating my right to return and salary was not acceptable. As soon as I got home I phoned their head office and they told me that there was no such requirement and my application was fine.

Oops - meant to say that wbas with Nationwide

I guess we just have to be prepared move to a 2nd one if it's not working out with FD...

I am 37 weeks preg and jst started mat leave. We too are looking at mortages and have been told by a IFA that Nationwide are the only ones that will consider you and you also need letters from your employer to state that you will be going back to work. I am the main wage earner and so we will not be able to get a mortage otherwise. I am trying not to stress too much. I do think it is discrimation!