Mortgages & Maternity Leave

baileyborough

Hi all,

My wife and I are finally getting around to getting a mortgage and getting our own home. It's all very exciting.

We recently had a few meetings, and have been all but guaranteed the funds we need (working through getting our approval in principles at the moment).

On top of this, we have just found out we're expecting our first as well.

What I'm trying to find out is if this will prevent us drawing down if it ends up taking till after my wife ends up on mat leave. She's going to be on full pay for the duration, so it won't affect our income, but I've heard a lot of conflicting stories. Curious to see what people here have found?

Thanks.

seamus

The affordability calculation takes dependents into account. If you have dependents, then it will generally reduce your ability to pay because you may be on reduced hours and/or have to pay for childcare. It's not about maternity leave/pay at all since that's a short-term adjustment in your cashflow. Having a child is a long-term adjustment in cashflow

So in general, everyone tends to advise that you don't tell the bank that you're expecting, or you may find that they reduce the amount you can borrow.

baileyborough

Thanks seamus.

That all makes sense. My question then is, does this get hairy if/when August rolls round and all of a sudden oh by the way my wife is now on mat leave? Or can you avoid telling them anything at all, etc.?

seamus

Once you're fully approved, then you don't really need to worry about it. Of course, this requires that you have found a place and applied for approval on it.

If you get approval in principle, and in June you go for full approval and the meet the mortgage advisor with a huge belly, then you're not going to be able to get away from it.

If you have full approval in March but don't draw down till September, then they may look for more documentation at that point (banks can be a pain in the hole), one of which may be payslips, which may reveal maternity pay.

So, the short answer is that you should either reveal the pregnancy up front, or aim to be drawn down before maternity leave starts.

It's not that big a deal really. The assessment team will look at your application - young couple buying their first home - assume that children are in the post anyway and adjust your affordability accordingly.

Trish56

Hi, I'm a mortgage broker. If you are submitting an application when pregnant you are asked on the application how many dependents you have and ages and your answer would be nil. If you are on maternity leave when completing the application you just need to submit a letter with a completed salary certificate from your employer stating you are on maternity leave and what date you are due to return to date.

When you have dependents then they will need to know if you pay childcare and how much and this could affect the amount you can borrow as the childcare would be treated similarly as a loan.

Hope this helps.

baileyborough

That's brilliant to hear Trish.

In your experience, where do banks come down on HSE probations? We've recently found out her nursing probation is longer than anticipated, so are concerned we may not be able to draw down in time. She can get letters etc. from work claiming she's a permanent staff member etc. but I'm not sure how these will go down.

Trish56

A lender will normally issue a loan offer for people on probation but don't allow drawdown until probation is finished.

baileyborough wrote: »

That's brilliant to hear Trish.

In your experience, where do banks come down on HSE probations? We've recently found out her nursing probation is longer than anticipated, so are concerned we may not be able to draw down in time. She can get letters etc. from work claiming she's a permanent staff member etc. but I'm not sure how these will go down.

listermint

Get the Salary Certificates,

enter time of tenure in the companys/organisations.

dependents is zero as the child is not dependent yet.

Keep it basically factual and dont shoot yourself in the foot.

Trish56

All salary certificates ask if the applicant is on probation so employer has to answer yes or no and indicate what date the probation is finished.

OP when is she finished her probation? Are you going directly to a bank or dealing with a broker?

How much of her income is needed to cover the mortgage? a good Broker or Mortgage Advisor should be able to make a case depending on the joint income, how long she is nursing and hopefully will take into account the shortage of nurses in this country. She should also submit her CV with the application.

Lenders may deal with public servants on probation differently than private however I have no evidence of that but it is worth checking out and please tell her to stop worrying...….you will get there.

baileyborough

Dealing Directly with bank. She finished probation in October, which is no good for us. I finish mine in March. (the timeline we're looking at)

Unsure exactly of how much of hers we need, it's probably 55-60% me, to 40-45% her.

She's nursing since 2009. I'll add the CV.

Trish56

I take it you mean she finishes probation in October. Have you got the income cert. completed yet and submitted to the bank. To find out how much of her income you need multiply your income by 3.5 and then subtract that from the mortgage amount and divide that by 3.5. Example

Mortgage = 300k
Your income 60k x 3.5 = 210k
Balance = 90k by 3.5 = €25,700.

Might be a good idea to bring in 3 years P60's to show past earnings.

baileyborough wrote: »

Dealing Directly with bank. She finished probation in October, which is no good for us. I finish mine in March. (the timeline we're looking at)

Unsure exactly of how much of hers we need, it's probably 55-60% me, to 40-45% her.

She's nursing since 2009. I'll add the CV.