People apply for mortgages all the time when pregnant, but how does it impact on your chances of getting a deal from the high street lenders? Here’s our answer to the commonly asked question “can you get a mortgage when pregnant” plus some hints and tips to consider.
Being pregnant can cause issues with some high street lenders, who might view your planned maternity leave as being indicative of a break in employment, where mortgage affordability could be at risk. However, some lenders are very good at helping customers who are due to have a baby and planned time off work.
All mortgage lenders are different and will assess your application based on risk. Our advisers will be able to help you submit a mortgage application into the right lender at the right time.
To get started, call us or complete an enquiry form.
Why pregnancy can affect a mortgage application
You can’t really get any bigger life events than having a baby and buying a property. They aren’t just two massive events but can also be very stressful.
And that stress can magnify if you find that being pregnant is potentially affecting your ability to find the right mortgage deal for you.
Lenders will look at your affordability and proof of income. If you are not working due to pregnancy during the application process, that means your income could be down, compared to what is usually is.
Given that lenders look at historical payslips, they might look unfavourably on this dip in income as proof that you won’t be able to make repayments.
Coupled with the likelihood of you going on maternity leave, lenders can also look at those future earnings dropping as proof of unsuitability to lend.
However, not all lenders are the same.
To find out which lenders you might be able to place a successful application with, contact us today to get advice from an independent mortgage adviser.
How to get a mortgage when pregnant
In addition to using an impartial mortgage adviser, here are some additional tips on how to improve your chances of success and avoid the lenders who could look on your application unfavourably.
- Find a suitable lender: lenders will have different requirements, so it’s about understanding which is the most suitable for you.
- Plan your affordability: if you take maternity leave, you might experience a reduction in income. Make sure that you have a plan in place to be able to afford mortgage repayments.
- Get a reference for your return to work: if you are going to be returning to work, get a written reference from your employer confirming the return date and what your wages will be. This will help the lender assess your application.
- Budget for childcare costs: once you return to work, you might need to pay for childcare, and how those costs could impact your ability to make mortgage repayments.
In addition to those tips, also think about the date your baby is due. If that is going to coincide with a moving in date, you might want to reconsider your planning… as the two together could be far too stressful to combine.
As an example, let’s say that the chain collapses before you are due to complete the purchase. You might have to then start the house hunting process all over again, getting nearer to your due date.
Do have you to tell a mortgage lender you are pregnant?
Mortgage lenders are not allowed to ask you whether you are pregnant due to discrimination law.
However, we do recommend that you are honest and tell them.
Because having children can have a huge effect on your household income and so any mortgage you apply needs to be based on affordability.
Beware of pitfalls of being pregnant when applying for a mortgage
Recent media coverage revealed that some of the high street lenders have changed their approach to offering mortgages to parents expecting a baby.
The Observer newspaper examined 15 of the largest UK mortgage lenders and applied under the premise that one of the applicants was pregnant.
They found that people expecting a baby or on maternity leave where asked to provide evidence by many lenders on whether they would be returning to work inside of three months of their application.
There was also a survey conducted by uSwitch which found that 10% of women applying for a mortgage when pregnant believed that had been discriminated against.
What mortgage lenders can ask you
As a pregnant woman, there are certain things that mortgage lenders are not allowed to ask you. For example, if they ask you whether you are pregnant or on maternity leave when applying for a mortgage, then this could contravene the Equality Act.
However, due to the ways in which the law surrounding lending has changed, mortgage lenders do have to be stricter now on how they assess your affordability.
With that in mind, they are legally allowed to take into account any things that could change your ability to repay the loan in the future. And of course, having a baby could have an impact on that.
It’s a slightly grey area for sure, but whatever the stage of your mortgage application, you should be honest and upfront at all times about any plans you might have regarding a break in employment.
How to improve your chances of success
You should always work with a mortgage adviser who understands which lenders are more favourable to your financial situation, including any planned maternity leave.
Our panel of advisers have access to a wide range of lenders who have historically lent to pregnant applicants.
Be sure that you can afford your mortgage based on what might change in the future, including any plans for having children.
Have you been discriminated against?
If you believe that you have been discriminated against due to being pregnant or on maternity leave when applying for a mortgage, you can make a complaint direct to the lender.
If that doesn’t work and you don’t get a satisfactory response, then your next step would be to get in touch with the Financial Ombudsman via their website.