How will maternity leave affect my mortgage application?
Welcoming a new family member is pure joy but sparks financial questions, especially regarding mortgages.
If you’re wondering, “How will my maternity leave impact my mortgage application?” the following should answer some of your questions;
Navigating the Mortgage Maze:
Lenders analyse your income and employment to assess mortgage eligibility. Maternity leave changes your income, so let’s explore its impact.
Be an Open Book with Your Lender:
Transparency is key! Discuss your upcoming maternity leave before applying. Lenders have specific policies for such situations, and early communication gets you personalised guidance.
Criteria can change from lender to lender, and just as in standard affordability calculations, lenders will want to know that you can afford the mortgage payments now, when you go on leave and if you return to work.
Your Financial Arsenal:
Along with payslips and bank statements, benefits like Statutory Maternity Pay (SMP) are your allies. Gather documents showcasing these income sources to strengthen your financial profile.
Some lenders may want to see a return-to-work letter from your employer, which will confirm income on your return.
A clear picture of your financial health boosts your application.
Unlocking Government Support for Maternity Leave.
Statutory Maternity Pay, Maternity Allowance, Universal Credit and ESA are all benefits that can be considered. Click here for more information on the Government website.
If you are due to go on parental leave, some lenders will look at existing and future childcare costs when assessing affordability and the future number of dependents declared.
Timing is Everything:
Apply when your income stabilises, like closer to your return-to-work date. Having a confirmed return shows consistent income, reassuring lenders.
Expert Guidance for a Smooth Journey When Maternity Leave is Due
The mortgage landscape can be tricky, especially during maternity leave.
At this time, Independent Mortgage Advice is essential in today’s climate to help you navigate the different requirements of lenders.
Maternity leave and mortgages might seem daunting, but proactive communication, understanding specific benefits, and a knowledgeable adviser on your side can pave the way for a successful application.
Please contact us today if you need help with your mortgage needs.