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Can I get a mortgage on maternity leave?
It is possible to get a mortgage even if you are on maternity leave. Many people believe that if they are receiving a lower income due to maternity leave, they will not be able to get a mortgage.
This is not correct. Lenders can accept people that are on maternity leave and even use their full pay rather than their maternity pay.
The way that lenders treat applicants that are on maternity leave differs from lender to lender.
It may differ in the documents needed to verify the return to work or they may need to see the applicant’s contingency plan (e.g. savings) to keep financially afloat whilst off work.
All lenders will however need to know what the plan is when it comes to returning to work.
An experienced mortgage adviser will be able to discuss your maternity situation to then look for a suitable mortgage lender for you.
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Will my mortgage lender need a return to work date following maternity leave?
Your mortgage lender will likely wish to know the date that you plan to return to work.
This is so they can be comfortable that you are in a good enough financial position to carry you through the maternity period before returning to work.
It is possible that your return-to-work expected date may change whilst you are off due to your circumstances.
Lenders can often be flexible about this and understand that things can change.
Regarding what a lender needs to verify your expected date of return to work, this will vary based on the lender.
Speak to your mortgage adviser to find out what they will likely need to verify returning to work.
Will lenders use my full come during maternity leave or my maternity pay?
If you plan to return to work, lenders will use your full income for calculating the amount that they will lend to you.
They will need to know that you plan to go back on the same hours and terms that you were previously on, and if not, what the new terms are.
For example, if you were previously working full-time earning £40,000 per annum but plan to go back to work on a part-time basis for £20,000 per annum, the lender would use the lower income.
This is to make sure you are in a position to pay your mortgage without going into financial difficulty.
Will I need to show a letter from my employer verifying returning to work to get a mortgage?
It is possible that your mortgage lender will wish to see a letter from your employer verifying your expected return to work.
If so, they will want to know what the expected date of return is along with your hours and earnings. This is likely to be requested from your manager or HR department.
Not all lenders, however, request this so talk to your mortgage adviser about what will be expected from you during the process.
I am not returning to work for a long time, will the mortgage lender still give me my mortgage?
Most lenders do not have a certain amount of time you need to return to work in to qualify for a mortgage. They do however need to make sure that you will be in a position to pay your mortgage so will ask for details of your plan.
For example, if you plan to return to work in 10 months and are only receiving statutory maternity pay, will this be enough to cover your outgoings?
The lender may even ask for evidence of savings to demonstrate that you would be in a position to pay your mortgage with a reduced income during the maternity leave.
All lenders have different criteria so find a qualified mortgage adviser who can help you.
What else should I consider if taking a mortgage whilst on maternity leave?
Another thing to consider if you are taking a mortgage on maternity leave is the costs once you return to work.
Lenders know that childcare is expensive. As a result, they will need to know about what the expected costs to pay for childcare are once you return to work.
When lenders assess your affordability to work out how much they can lend you, this cost for childcare is put into their calculator as a commitment.
It may be the case that you will not need to pay for childcare once you return to work.
For instance, if you have family close by that wish to look after the child or a partner who works from home, this may not be a cost associated with you.
Lenders can be flexible depending on the situation so tell your mortgage adviser your plan so they can look for a lender accordingly.
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Can I get a buy to let mortgage if I am on maternity leave?
You can get a buy to let mortgage if you are on maternity leave. Many lenders that offer buy to let mortgages do not have a minimum income criteria and as a result, they may be happy with just the income from your maternity leave.
This is not the case for all buy to let lenders as they have different rules.
For example, some buy to let lenders have a minimum income criteria. A common minimum income used by buy to let lenders is £25,000.
If your job was to pay you £30,000 per annum but you were currently receiving half of this due to maternity pay, the lender will likely need to be comfortable that you are returning to this job to meet that minimum income criteria.
An experienced mortgage adviser will be able to understand your situation to work out which buy to let lender you should use.
It is possible to get a mortgage whilst on maternity leave. Lenders will, however, need to know more about your plan to make sure that you continue to meet their criteria.
Lenders have a responsibility to make sure you can pay your mortgage so cannot be seen to be lending irresponsibly.
Due to this, they will need to be comfortable that your plan puts you in a strong financial position.
If you are thinking about taking a mortgage whilst on maternity leave, it would be wise to take professional mortgage advice. There are many mortgage lenders in the market so it can be a minefield.
An experienced mortgage adviser will be able to recommend a mortgage based on your situation.
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