Remortgage during maternity leave
Discussion
Our fixed rate ends in December so it is time to look at remortgaging: However, my wife has just started maternity leave and doesn't expect to return until August next year. I really don't want to throw money away on excess interest by putting it off until then, but I am concerned about how a maternity income may be treated for the affordability tests.
What is the best strategy in this situation? Are there particular lenders we should approach directly, or is it really best to deal with a broker?
Of note; 60% LTV in North Hampshire, around 3x joint income, no other debts. 1x 4 year old child and 1x baby on the way. Currently 5% repayment (long term fix at exactly the wrong time!) so real life affordability should not be a concern, but I understand that reality and the bank tests may be different.
What is the best strategy in this situation? Are there particular lenders we should approach directly, or is it really best to deal with a broker?
Of note; 60% LTV in North Hampshire, around 3x joint income, no other debts. 1x 4 year old child and 1x baby on the way. Currently 5% repayment (long term fix at exactly the wrong time!) so real life affordability should not be a concern, but I understand that reality and the bank tests may be different.
Lender selection will be key.
Some will want a written letter from her employer confirming return to work date, return to work salary, return to work hours and if there will then be any childcare costs etc.
Some will be happy with the last pay slips before maternity leave started.
Some will accept a letter from your wife confirming the details.
Some will simply not use your wifes income until she returns to work.
Some will want a written letter from her employer confirming return to work date, return to work salary, return to work hours and if there will then be any childcare costs etc.
Some will be happy with the last pay slips before maternity leave started.
Some will accept a letter from your wife confirming the details.
Some will simply not use your wifes income until she returns to work.
Sarnie said:
Some will want a written letter from her employer confirming return to work date, return to work salary, return to work hours and if there will then be any childcare costs etc.
This is what HSBC wanted from us.It's all boll*cks really as my wife subsequently gave up her job to become a full time Mum so our income is significantly less than the snapshot they took when granting us the mortgage.
What does your current lender offer? I've found that retention deals are as good if not better than some for new customers, if you stay with your current lender no need for any affordability checks and the process takes 5 minutes, no point changing unless you have to. Who is your current lender? Asking as Nationwide offer £250 to stay, others may offer slightly different incentives.
The current lender is Post Office (BOI). I've admittedly not spoken to them yet, but based on their web offers for existing clients I expect we will go elsewhere. Using a 5 year fix as a metric, they appear to want ~3% compared to ~2% available through Nationwide, HSBC or countless others on a 60% LTV - plus their SVR looks to be about 0.5% higher.
Thanks for the information Sarnie - that is in line with my expectations really, so knowing who will take the appropriate view before applying would be very beneficial. I've always applied direct for previous mortgages, but think it might be good to speak with you on this occasion.
Thanks for the information Sarnie - that is in line with my expectations really, so knowing who will take the appropriate view before applying would be very beneficial. I've always applied direct for previous mortgages, but think it might be good to speak with you on this occasion.
simion_levi said:
The current lender is Post Office (BOI). I've admittedly not spoken to them yet, but based on their web offers for existing clients I expect we will go elsewhere. Using a 5 year fix as a metric, they appear to want ~3% compared to ~2% available through Nationwide, HSBC or countless others on a 60% LTV - plus their SVR looks to be about 0.5% higher.
Thanks for the information Sarnie - that is in line with my expectations really, so knowing who will take the appropriate view before applying would be very beneficial. I've always applied direct for previous mortgages, but think it might be good to speak with you on this occasion.
You are pretty spot on, most retention products will always be behind leading products elsewhere, feel free to drop me a line, always happy to chat! Thanks for the information Sarnie - that is in line with my expectations really, so knowing who will take the appropriate view before applying would be very beneficial. I've always applied direct for previous mortgages, but think it might be good to speak with you on this occasion.
Sarnie said:
Lender selection will be key.
Some will want a written letter from her employer confirming return to work date, return to work salary, return to work hours and if there will then be any childcare costs etc.
We moved whilst my wife was on mat leave, this is what our proposed lender wanted - Nationwide, or I should say what our advisor thought they would ask for, nut we didn't get that far.Some will want a written letter from her employer confirming return to work date, return to work salary, return to work hours and if there will then be any childcare costs etc.
In the end due to her intention to hand in her notice in and take a job closer to home we took her name off the mortgage and did it solely in my name.
Matt_N said:
We moved whilst my wife was on mat leave, this is what our proposed lender wanted - Nationwide, or I should say what our advisor thought they would ask for, nut we didn't get that far.
In the end due to her intention to hand in her notice in and take a job closer to home we took her name off the mortgage and did it solely in my name.
Yep, we had to place one elsewhere recently when the lady couldn't provide a return to work date as she didn't know if she was going to go back.....lenders can't lend against that sort of uncertainty...In the end due to her intention to hand in her notice in and take a job closer to home we took her name off the mortgage and did it solely in my name.
66Elan said:
Nat West are good:
We will accept the full salary for women currently on maternity who intend to return to work (no employee letter required)
They require a letter from the applicant detailing her return to work details (along with the three months pay slips prior to maternity leave)....which is one of the things I posted at the outset that a lender would ask for. We will accept the full salary for women currently on maternity who intend to return to work (no employee letter required)
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