Mortgage Advisor Q&A: Securing a mortgage whilst on maternity leave
Is it possible to get a mortgage whilst on maternity leave?
As many couples think about moving to larger homes when their family starts to grow, it is not surprising that we are often asked if it is possible to get a mortgage when on maternity leave.
The simple answer is yes for almost all circumstances. However, there are lots of considerations and lenders do vary in the way they calculate affordability during this time.
Some lenders will use only the income during maternity leave in their affordability calculation which will often leave the maximum loan available too low.
However, other lenders will use the ‘usual’ salary or the ‘return to work’ salary in the calculation if return to work is within the next few months. If return to work is not anticipated for a longer period of time there are still one or two lenders who will consider the application under these terms.
In order to evidence this, lenders are likely to request a letter from the client confirming the ‘usual’ salary and the current income. They will also request a letter from employers to confirm the return to work date, the terms of the contract – hours and ‘return to work’ salary.
It will be important that mortgage payments can still be afforded during the maternity leave so evidence of savings to substitute the difference in income and mortgage payments will often be required for the remainder of the maternity leave.
Consideration as to future child care costs when calculating affordability should be made as well to ensure that the mortgage will be affordable long term.
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