O/T Mortgage on maternity leave?

KimmyS84 · Oct 29, 2009 4:19PM

Does anyone know anything about this? We are in a shared ownership house at the moment which is quite small, so when we decide to have a second child we will need a bigger place. We have 40% of the house at the moment, and the only way I can see to get a bigger house is to try and buy more of our current house, hopefully increasing what we will have to buy a bigger place with

Anyway, what I would like to know is if I can get a mortgage (to increase our share to 70%) whilst on maternity leave. I am on SMP at the moment, and my last 3 payslips would show 90% of my earnings, then a little bit of 90% and SMP, then just SMP, which wouldn't be enough

I will be going back to work at the end of January- my employer is happy to write a letter detailing my wages etc. Do you think mortgage companies would accept this?

I guess we could wait till after I go back to work, but preferably we wouldn't have to wait as property prices are increasing every day, so it would be cheaper to buy now than in a few months

If anyone has any kind of clue that would be great! x

treacle28 · Oct 28, 2009 2:58PM

I have had major issues over this recently. Very similar really. We are on a shared equity scheme where we have to pay back 30% of the value of our property when we sell. We want to up size and use a similar scheme.

I got in touch with our mortgage company who said they would base it on my maternity pay. I said that was stupid cos I was going back to work in Feb so they agreed to base it on my full time salary pending a letter from employer confirming salary but would not release the funds until 4 weeks before I go back. The reason for this was given that I might change my mind and not go back.

I made a fuss and wrote a letter explaining that I was clearly going to go back to work as I'd be bloody stupid if I took out a mortgage and then didn't go back to work as I wouldn't be able to pay the mortgage and the hosue would be repossesd! I added that I didn't for one for one minute think that they would say not to worry about paying it back.

I also said that even if I were not on maternity leave I could hand my notice in at any time so therefre hinting at discrmination and they agreed that I was right and they release the funds in time and that I prompted a policy review of the whole situation. I was pleased.

However since then the buyer for our property has pulled out because he actually couldn't afford the mortgage. Why he didn't think about that first I don't know and why the estate agents didn't ask about that I don't know either but hey ho!

All my efforts were a waste of time but I do think if they say no first it's worth appealing it.

hayls-49296 · Oct 28, 2009 3:42PM

can you ask your employer to offer a reference for you, confirming only that you are employed there, and your salary. Not that you are on mat leave, and Then tell the mortgage people that you shread your pay slips. X

pumbacat · Oct 28, 2009 5:29PM

You should just need a letter confirming you are returning to work and your annaul salary

Sunflower81 · Oct 28, 2009 5:32PM

I would think they'd accept written confirmation from your employer of your earnings - it shouldn't count against you that you're on maternity leave, like treacle28 says, it'd be discrimination - and she makes a good point that anyone could resign form their job at any time, no-one can guarantee earnings.

A friend of mine had a similar but slightly different issue - she used a salary sacrifice scheme at work to pay for on-site childcare, so her salary given on her payslip was minus childcare costs, making it look like she earned less than she did - her mortgage lender was happy to accept a letter from the employer whn she moved house.

Your payslip will say SMP anyway, so it'll be obvious to the lender why your current earnings are lower than your usual earnings

If you have any problems with it, I think it's definitely worth pursuing

Jolli · Oct 28, 2009 6:23PM

OMG treacle - the exact same thing just happened to us! we had a buyer for our flat and then the 'dream' buyer with mortgage all in place and ready to go turned out he can't get any mortgage at all! We were fuming as we were off market for 6 weeks and someone else who wanted to buy it obviously went and bought somewhere else!
You must be gutted after going through all that rigmarole of sorting your salary and your mortgage!!
Good for you for standing up to the mortgage company though. Round here shared ownership are more expensive than my property! we looked into buying one cos we could never keep up with the mortage and it worked out 200,000 for a small 3 bed semi - and after paying the mortgage and the rent it was a fortune every month. when we were on the shortlist I explained that I was preganant and would be on maternity leave so we needed help with housing and the housing association said we would no longer be eligible because we wouldn't be able to afford it!!! how does that help people! sorry that turned into a rant then...

treacle28 · Oct 29, 2009 6:36AM

I know it's ridiculous isn't it? Stupid estage agents letting anyone just wander in off the street and make offers! We're not on a shared ownership, we don't pay rent on the other share it's just like a loan for the other bit with no interest or payments. We were looking to do the homebuy direct scheme with the new one where you get an interest free loan for 5 years from the builder and the government - I don't think it's available in all parts of the country and it's only on new houses but maybe you could look at that? It's also mostly for first time buyers but if you needed to up size then you can do it.
Our flat has been on the market for a year and didn't really think we'd be moving anytime soon and was ok with it, then we got this offer, found out about the scheme, found a house and moved in (in my mind at least!) and now we are not and are gutted!

KimmyS84 · Oct 29, 2009 4:19PM

Thanks girls. I think it would probable be worth waiting so it gives us time to get solicitors fees etc put aside, but I'm impatient!! We would have done this before going on maternity leave if I had known they will still lend us 100% LTV!

I think I will have to have the first few months when I don't pay for childcare straight from my pre-taxed wages. Obviously it will mean it costs a bit more but if it means getting a bigger mortgage... x

O/T Mortgage on maternity leave?

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