Can I get a mortgage whilst on maternity leave? This is a question that our team at The Levels Financial hear fairly often when helping our clients applying for mortgages. Applying and getting a mortgage whilst on maternity leave can be slightly more challenging than when not, but it is definitely possible.
Our team of Yeovil-based mortgage advisors have helped 100s of clients get the right mortgage for them. We will work hard to understand your personal and financial circumstances and then, with access to over 12,000 mortgages from 70 lenders, we will help you find the right mortgage to suit you.
In this article we will cover the most asked questions when it comes to applying for a mortgage during maternity leave. Whether you’re a first time buyer or looking to remortgage, our team will be able to help.
- Can You Get a Mortgage When On Maternity Leave?
- Do You Have To Declare You Are Pregnant When Applying For A Mortgage?
- Will Maternity Pay Affect My Somerset Remortgage?
- What Should We Bear In Mind When Applying For A Mortgage On Maternity Leave?
- How Much Deposit Is Needed For A Maternity Leave Mortgage?
- What Is The Most You Can Borrow On Maternity Leave?
- What Documents Are Needed To Apply For A Mortgage On Maternity Leave?
- Are There Any Special Requirements For A Mortgage When On Maternity Leave?
- Are There Any Lenders Who Specialise In Mortgages For Those On Maternity Leave?
- Are There Any Advantages To Applying For A Mortgage When On Maternity Leave?
- Somerset Mortgage Advisors – We Can Help
Can You Get a Mortgage When On Maternity Leave?
Securing a mortgage while on maternity leave can be a challenging process, due to the fact that lenders are unable to assess an applicant’s income and employment status during this period. However, whilst it is a little trickier, getting a mortgage whilst on maternity leave is not impossible. You may just have to jump through a few additional hoops to get there. The availability of mortgages for those on maternity leave can vary depending on the individual’s circumstances and the policies of the particular lender.
The main complication when applying for a mortgage whilst on maternity leave is that your monthly income is lower than what it would be when working full-time. This means lenders may use the lower income figure (the amount you’re paid on maternity leave rather than your typical job salary) to calculate your mortgage affordability.
So while some lenders may not be willing to lend you a sum based on your current income, other lenders may calculate your affordability based on your regular salary compared to your maternity income. In turn, it is always important to work closely with a mortgage advisor when applying for a mortgage whilst on maternity leave.
Ultimately, obtaining a mortgage while on maternity leave depends largely on the individual’s unique situation and how they compare to the lender’s criteria. For more information about remortgaging, see our blog post: ’four things to know when remortgaging in Yeovil.’
Do You Have To Declare You Are Pregnant When Applying For A Mortgage?
Whether you’re moving home or your current mortgage agreement is coming up for renewal, it is always important to disclose as much appropriate information as possible to ensure you’re getting the right deal for you. When applying for any large loan, your lender will ask you to name any material changes that could affect the repayment of the loan, pregnancy is one of the scenarios they would expect to be informed of when processing your application.
Some lenders may view pregnancy as a potential risk factor in approving a loan for purchasing property because it could negatively affect the borrower’s ability to make payments. While some lenders may require additional documentation or paperwork if they discover that the applicant is pregnant further down the application process.
Ultimately, borrowers should carefully evaluate the risks before deciding whether or not to disclose their pregnancy status when applying for a mortgage. Disclosing this information can help ensure that you receive fair treatment throughout the process and secure an appropriate loan to meet your needs.
Will Maternity Pay Affect My Somerset Remortgage?
Maternity or paternity pay could have an impact on your remortgage. Which is why, at The Levels Financial, we always encourage any clients on maternity leave to provide a wide range of documents when applying for a remortgage, as the pay received during this leave of absence can affect the process of remortgaging.
Typically, lenders will consider the income generated from maternity pay when assessing an application. However, due to the often irregular nature of payments received during this period, our team of Somerset mortgage advisors may require further evidence and proof that you have the sufficient funds available.
It is therefore important for applicants to provide bank statements or other documentation that clearly demonstrates their financial position when applying for a loan.
What Should We Bear In Mind When Applying For A Mortgage On Maternity Leave?
Maternity or paternity pay could have an impact on your remortgage. Which is why, at The Levels Financial, we always encourage any clients on maternity leave to provide a wide range of documents when applying for a remortgage, as the pay received during this leave of absence can affect the process of remortgaging.
Typically, lenders will consider the income generated from maternity pay when assessing an application. However, due to the often irregular nature of payments received during this period, our team of Somerset mortgage advisors may require further evidence and proof that you have the sufficient funds available.
It is therefore important for applicants to provide bank statements or other documentation that clearly demonstrates their financial position when applying for a loan.
When buying a house while on maternity leave, it is also essential to factor in other costs such as stamp duty and solicitors’ fees. If these expenses are not taken into consideration prior to making an offer on a property, they could potentially derail any hopes of securing a successful mortgage application. View our stamp duty calculator to see how much stamp duty you could potentially be entitled to pay.
For this reason, it is highly recommended that applicants ensure they have all necessary funds available before submitting their application. This will help to ensure that all relevant costs can be covered and guarantee a smoother process.
How Much Deposit Is Needed For A Maternity Leave Mortgage?
Deposits typically are needed for a minimum of 10% of the property’s value, regardless of your personal or financial circumstances. However, having a larger deposit will open you up to more mortgage lenders and rates.
What Is The Most You Can Borrow On Maternity Leave?
The amount available to borrow whilst you’re on maternity leave will differ depending on various factors, including:
- The lender – some will base their mortgage loan based on your maternity pay, others will base it on your previous income. While others will allow you to borrow 4.5 times the amount of income you evidence. Which is why finding the right lender when applying for a mortgage on maternity leave is half of the journey.
- If you’re making a joint mortgage or a single mortgage. If you’re applying for a joint mortgage, your lender will look at both parties’ earnings and loan between four to five times the combined income.
- The amount of deposit you’ve saved, the higher your deposit the less money you will need to borrow. As mentioned above, the minimum deposit amount is 10% of the overall value of the property.
What Documents Are Needed To Apply For A Mortgage On Maternity Leave?
When a person is on maternity leave their average earnings will differ during that period compared to previously. Which is why it can be difficult for lenders to accurately calculate the applicants affordability.
When applying for a maternity leave mortgage, you can provide evidence of your income with the following documents:
- Your partner’s wage
- The date of your return to work
- Your income upon returning to work
- Credit score
- Past six months (off of maternity leave) paychecks
- Bank statements
- Tax returns
- Evidence of maternity leave
- Any unemployment benefits
If you are struggling with providing any of the above information, our team of friendly mortgage advisors are on hand to help. See our guide on how mortgages work for more information.
Are There Any Special Requirements For A Mortgage When On Maternity Leave?
Other than lenders potentially looking at your maternity pay compared to your previous income and salary and having to provide additional documentation, including:
- Proof of sufficient income
- Proof of employment status and duration
- Other financial obligations that need to be met before the mortgage can be approved
There are no other special requirements for applying for a mortgage whilst on maternity leave.
Are There Any Lenders Who Specialise In Mortgages For Those On Maternity Leave?
At The Levels Financial, Somerset, we have access to over 12000 loans from over 70 lenders and can work with you to ensure that we find the right mortgage to suit your needs. Choose from a wide range of mortgage types including:
Fixed-Rate Mortgage:
A fixed rate mortgage is when your monthly mortgage payments and interest rates will stay the same on a ‘fixed’ rate throughout your mortgage agreement. These are normally available for two-five years.
Standard Variable Rate Mortgage:
A standard variable rate mortgage is often one of the more expensive mortgage products on the market, however, our team of mortgage experts will always work hard to get you the right rate to suit your needs. Interest rates will vary depending on lenders but are normally higher than the Bank of England’s base rate. (See our latest blog post ‘March’s base rate increase and what it means for you’ to learn more about the current base rate).
Discounted Rate Mortgage:
Similar to standard variable rates although they will include a discounted rate for a set amount of time, which can be pre-arranged with the lender as to when that discounted time will be.
Tracker Mortgage:
Tracker mortgages have a variable interest rate as these will be set in-line with the changes to the Bank of England’s base-rates.
Capped Rate Mortgage:
Like a variable rate mortgage, the capped mortgages’ rate will increase and decrease with the base-rate, however, unlike a variable rate, the capped mortgagee will have a limit on how much the interest rate can increase by.
Offset Mortgage:
If you’re remortgaging, rather than applying for your first mortgage, an offset mortgage is a great option to apply for when on maternity leave. This can help you lower your total payable amount over the term of your mortgage as you will be offsetting any savings against your outstanding mortgage balance.
For example if you had a mortgage of £150,000 and had around £50,000 in savings, you will only have to pay interest on £100.000 of your mortgage.
Lenders who specialise in mortgages for those on maternity leave are frequently sought out due to the unique circumstances associated with this demographic. Because of the unique nature of maternity leave, lenders offer special terms and conditions when it comes to mortgage applications from this group.
Our team will always work hard to provide you with all the information and provide you with the right rate for you. We are with you every step of the way from first applying to moving into your new home.
Are There Any Advantages To Applying For A Mortgage When On Maternity Leave?
Applying for a mortgage while on maternity leave can offer advantages to those applying. Maternity leave often includes pay from the government or employer, which may give borrowers more time to save money for a down payment and closing costs.
Lenders may also be more willing to make an exception for borrowers who are on maternity leave due to their unique financial circumstances.
Somerset Mortgage Advisors – We Can Help
The process for applying for a mortgage on maternity leave is an important one to understand, as there are certain requirements that must be considered. Which is where we come in, our team of award-winning mortgage advisors in Yeovil are on hand to help you find the right mortgage rate for you, regardless of your current personal, family or financial situation.
Don’t just take our word for it, see what our clients have to say:
“What can I say? Amazing advice and service from the beginning. Connor and his team worked really hard to get our mortgage offer for us as it was not straightforward. Highly recommend it if you want great honest advice and service with a smile and a sense of humour. Cannot recommend enough!” Sarah Szewiel
“Everyone at The Levels has been friendly, professional and extremely helpful throughout the remortgage process. I’m not sure they ever stop working, as they always seem to be available on the end of a phone! I would not hesitate to recommend The Levels to anyone needing a mortgage or remortgage. The service provided is truly excellent and I will definitely be using them again.” Jay B
“The Levels Financial was recommended to us when we were looking to remortgage by a financial advisor friend who dealt with our first mortgage. From our first phone call with Janek to our mortgage offer, he was available for advice and reassurance whether that be during the day, evening or weekend. We couldn’t be happier, we will definitely recommend them and use them again.” Emma Allen
See how we can help you by contacting us today by emailing us at admin@thelevelsfinancial.co.uk or calling us on 01458 772040.
Important information:
You may have to pay an early repayment charge to your existing lender if you remortgage.
If you do not keep up with your mortgage repayments your home may be repossessed.
A fee may be included for mortgage advice. The actual mortgage amount you pay will differ depending on your circumstances. Fees can be up to 1%, but typically a fee is 0.3% of the borrowed amount
