Maternity Leave Mortgages

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[00:01:35] Hello, and welcome to my Bump 2 Baby Expert podcast, where we bring experts from all over the UK to answer your questions on everything, pregnancy to preschool.

[00:01:59] Today. I am speaking to Lorraine Collie from Zing Mortgages in Bishop’s Stortford. And today we’re going to be talking all about mortgages on maternity leave. All your questions will be answered hopefully within this podcast. I hope you enjoy it.

[00:02:21] Hello everybody. And welcome to my Bump 2 Baby’s Expert podcast. Today, we are talking about a very important subject, maternity leave mortgages, everything you need to know about having a mortgage on maternity leave. And today I am joined by expert Lorraine Collie, who is our mortgage protection specialist in Bishop’s Stortford.

[00:02:47] Hi Lorraine. How are you? 

[00:02:49] Lorraine: Hi, Carla I’m great thanks how are you? 

[00:02:52] Carla: I’m very well thank you very well. So I’m really looking forward to talking to you on this subject. I actually am pregnant at the moment, so finding it very, very interesting finding out about how it works with maternity leave and mortgages. Um, so I’m looking forward to this, this chat, but do you want to introduce yourself Lorraine? Tell us a bit about you? 

[00:03:14] Lorraine: Yeah. And congratulations on your pregnancy. So I’m Lorraine, I’m a mortgage and protection advisor. I work for a company called Zing Mortgages, work from home, always did sort of base myself at home anyway. So I was kind of ahead of the pandemic in that instance. We work, a lot of the time at the minute is remotely, but we can do house visits if people are comfortable with that. Some people like, you know, have face-to-face contact still and that’s absolutely fine. So I do do face-to-face contact as well as, zoom appointments and telephone calls. It’s such a sensitive subject when you’re talking about people’s finances so often, they find it a bit more comfortable in their own homes.

[00:03:59] So I’ve been doing this for about three years now. And really enjoy it. I love watching people grow. You know, I’ve seen them go from buying their first house to the families coming along and then moving and upgrading and making sure that every step of the way they’re covered or if they, any unexpected surprises that come along that life like to throw at you. So we offer them insurance packages as well to make sure that you’re covered in the event of that happening. 

[00:04:29] Carla: That’s really good. No, that’s great. Um, cause I know you also cover the protection side of things as well don’t you?

[00:04:38] Lorraine: Yeah, protections a huge part of what I do. Cause I believe in it’s so much, you know we insure our homes, we insure our cars, even our mobile phones, but people forget about themselves and often you find it’s not until, somebody has a baby that it becomes, oh, right, this is, this is serious what’s going to happen if I can’t work, if my partner can’t work, you know, or the death of either one of you, you’ve all these scenarios going through your head.

[00:05:06] And it’s so important to make sure that you’re prepared so that if you do end up in that situation, you’re covered and it’s one less thing to worry about. So obviously when we’re starting out with first time buyers, we’ll look at covering your income if you’re unable to work. I mean, we’ve seen from the pandemic that people really struggled on 80% of their wages.

[00:05:27] Um, and, hadn’t really thought about it before. So we’re doing a lot of income protection at the moment where people are covering their income in the event of long-term sickness, meaning that their mortgages are still affordable. Also, um, life insurance to cover the mortgage on the death of either partner or yourself. Meaning the mortgage is completely paid off and also critical illness, critical illness, you know, one in two of us get cancer in our lifetime and it’s the most claimed on insurance site of them all. So at a time like that, the last thing you want to be doing is worrying about finances. So putting something in place to cover your mortgage and outgoings in that event is also really important. So we’ll kind of do an overhaul of your scenario how much, you know, we think you can live on, what your budget is each month, things that, yeah okay won’t need to include that. Cause that’s not a necessity and work to your, to tailor it to your personal needs.

[00:06:31] Carla: Absolutely. Yeah. I think what you’ve mentioned there, I think there’s a lot more people that are very open-minded when it comes to protection, because they’ve actually seen it firsthand what can happen if they can’t work. It’s so important. And I think something else I want to touch on while we’re talking about this, is a lot of people, you know, can think, oh, I’ll go online and just get it online. And it’s cheap and cheerful, et cetera. But, um, you know, I, I’ve known a lot of people that have actually gone to claim on insurance’s, and actually they’ve not been covered for what they thought. So that’s why, you know at My Bump 2 Baby, we think it’s really important to, to actually speak to a professional in the local area who knows you and can actually review the policy properly.

[00:07:16] Lorraine: Yeah. This is it, I mean, you know, shopping online is so popular at the minute, that a lot of people are doing it. But would you then go buy a car in Tesco, you know, no you would want advice on which car to get, what’s going to meet your needs. So definitely speaking to an expert. And there’s so many products available now, that you might not necessarily be getting the right one for you. Often there’s a misconception where people think. That they want to insure their life in the event of death, but actually you’re more likely to use a critical illness policy than you are a death policy, because you’re less likely to die within the term of your mortgage, but you are likely to be critically ill. So it’s about, you know, somebody knowing your circumstances, and knowing where there are gaps in that to cover you.

[00:08:08] There’s a really good policy as well called family income benefit. And this pays out on death. Obviously, you know, if you cover your mortgage, that thats paid off, but then how do you work? You know, often you’ve got lot of mums at home and one wage families. If that wage was to disappear. How do you survive? So we look at things like that as well. So we look at family income policy that would cover that wage on the event, in the event of death, meaning you’re covered all angles. So there’s a lot of things that people don’t think about. And again, it’s just, its about getting the best isn’t it? There’s no point in paying a monthly premium for something that’s not going to cover you if you were to be in that position.

[00:08:51] Carla: Exactly. And I think that’s a mistake a lot of people come back and they’ll say, oh, I made a mistake with that because they might’ve set it up 10 years ago. And it was obviously, you know, the younger you are, the cheaper it is, isn’t it a lot of the time. And then they’ve set it up and they’ve been paying into something that actually. Might not have paid out or it’s not actually suitable for their needs. And then it comes to that time and claiming, and it’s like, oh God, God, I’ve paid. It’s a double hit actually, because you’ve paid for it. And you’re not actually able to claim on it for some people. So, so it’s really, really important just to make sure that everything you know, is covered and your covered the best, best for you really. It’s not about kind of spending an absolute fortune. You, you do what you can afford, but it’s a case of making sure your family is protected should the worst happen. And unfortunately, there’s so many circumstances, the worst does happen. We all know someone that’s passed away young and you know, it’s, it is really sad. So, so that is, is something that’s really important. 

[00:09:51] Lorraine: Exactly. And when you touch on age there as well, you know, I deal with a lot of first time buyers and each time I’m like, please take some protection because you’re so young know that it’s really cheap. You’re going to come back to me in 10 years time with a wife and a baby, and you’re going to want insurance and it’s going to be triple the price. Because unfortunately it will go up each year. You know, your age does go against you when, when it comes to insurance. So it’s so important that you think about it and do it as early as you can to save yourself in the long term.

[00:10:24] Carla: Absolutely. So with the maternity leave mortgages. So with that, if someone is thinking of applying for a mortgage. But they’re going on maternity or they’re on maternity, and they’ve seen their dream house. Can they get that mortgage or not? 

[00:10:40] Lorraine: Yeah. So the lenders don’t discriminate against people going on maternity leave, obviously they all have a different view on it. There’s so much criteria surrounding it. Um, and they all, they’re all very different. But overall, um, the, some lenders will want to, will work on your last payslip before you went on maternity. They may request a return to work letter, to confirm that your due to return to work on the same terms and the same conditions, same hours, et cetera. And they’ll take that and they will use your full pay. Other lenders if you are on statutory maternity pay rather than, you know, full maternity pay. They might like to see a bit of savings, to prove that you can cover yourself for that year, while you’re out of work. So it’s not, it’s not a no, but there are different criteria’s with the various lenders. So again, it’s about speaking to someone in the know, so you can find one that fits with your circumstances.

[00:11:39] Carla: That’s great. So what would someone do if they’re on maternity leave and the partner’s got a full-time wage, but between them they’re really struggling to pay their mortgage. What are their options? 

[00:11:52] Lorraine: So with struggling to pay your mortgage. The first thing you’ve got to do is speak to your lender. It’s so important that you alert them immediately and don’t just stop paying it. When you speak to them, they can, there is various options that they have available to you depending on your circumstances. So they may give you a payment holiday. They may switch you to an interest only for a while. Which will lower your payments and make it more affordable for you. But speak to them because they are human and we’ve all seen again from the pandemic that they did offer payment holidays, then, you know, they were behind, their clients when it was, when they were in a difficult situation. So, um, always speak to them in the first instance and gain the help that you need. 

[00:12:36] Carla: That’s great advice. And, and during maternity leave, by being on maternity leave, does that affect future mortgages or is that just something they take into account? And that happens because people do have babies. 

[00:12:49] Lorraine: Yeah. So it won’t necessarily affect your future mortgages. I mean, if you’re going to return to work on the same terms and the same income, then you’re not going to be affected at all. If, for instance, you were return on part-time, so you’re not earning as much, then the next time you go to purchase the affordability won’t be as high as it was previously. 

[00:13:08] Carla: Right. Okay. That makes sense. And, and remortgaging, I assume that’s the same with buying a new property on, on maternity leave. You can’t, they won’t discriminate you against that. Is that right? 

[00:13:20] Lorraine: No. So again, it will go back to the criteria where they’ll assess the situation. They’ll either take your last pay slip from pre maternity and return to work letter. And then remortgage you from there. If you’re looking for extra borrowing again, the affordability will be assessed based on your new income. If you’re going to go back part-time or your full-time income, if that’s how you’re returning. So it’s really specific to everybody’s individual needs.

[00:13:49] Carla: Right. Okay. And, what about if you’re on maternity leave and you’re self-employed how does that work? Does that, is that a fairly similar, similar process? 

[00:13:59] Lorraine: Yeah, so with self-employed, um, it’s been really difficult because the lenders always worked off last years accounts and obviously when Covid happened they realised that hold on a second, we’re working off 2019 accounts but they might not have earned anything in 2020. So they’ve, they’ve kind of changed their criteria slightly whereby with self-employed they look at your accounts, but they also look at your business bank statements to see what sort of income you’ve had over the last three months. And then annualise. Um, to see if you’re in line to earn, what you’re you were earning.

[00:14:37] So it would work similar with maternity leave. And again, if you’re self-employed and not earning anything, but you do have this statutory maternity pay, they would use either that income or if you did have savings to back it up, then they would say, okay, yet if you’ve got a good track record, self-employed okay. We believe that when you returned to work. You’ll maintain the same income going forward. So they would look at it that way. So again, just down to each lender and finding the best lender for your situation. 

[00:15:07] Carla: And do you work with a few lenders then Lorraine? 

[00:15:11] Lorraine: Yeah so we’ve got access to over 150 lenders in our panel and we’ve good working relationships with them as well. So often when, as part of the research we would speak to individual lenders directly, we put scenarios out to the lenders and say, does this fit with you? How, can we make this work? So yeah, we build relationships with the various lenders and get to do their criteria inside out. Although it’s changed so much over the last year, it was really difficult to keep up. But we do have, we were bombarded with emails daily about changes to criteria. So we really, are as up to date as we can be, and we’re able to find out who’s best for what situation very, very quickly as well. 

[00:15:55] Carla: Thats great. And can you help people that have had debts previously, um, as well where they’re not really sure if they could quite get a mortgage, but they’d like to try?

[00:16:07] Lorraine: Yeah, I see. I’m seeing quite a lot of this at the minute where people are often afraid to come forward. Oh my friend told me, I can’t get a mortgage because I’ve got a default CCJ, whatever it may be. And thats total false information. This is where you really need to speak to an expert so that we can guide you through where you need to be. So it’s not necessarily a no, there our specialist lenders, that deal with people who’ve been in financial difficulty previously and will consider you, will consider your application. That might be reflected in the rates. But if it gets you where you want to be, you know, then it can be done. So again, it’s about speaking to someone who knows what they’re dealing with when it comes to that, and not been afraid to. We’ve all been there, you know, we’ve all been there were, we’ve got ourself financial difficulty, whether it be when we were young and silly or, you know, when we were older and suddenly things have just gone on top of us, you know, so don’t be afraid to come forward and speak and get help.

[00:17:09] You know, that’s the best thing to. And even if we can’t, even if we can’t do anything right now, we can put a plan in place. So often what I find with customers that have been impacted is, okay, I can’t help you at the minute, but in six months time, this is an option in 12 months time, this is an option. So then we can keep in touch and kind of maintain their credit report in the meantime, and work with them to get them to where they want to be. So I do, got a lot about the minute, especially with first-time buyers who are struggling with their credit, whereby i’ll just do three monthly phone calls with them to check in, see how the deposits going and see how their credit report is looking and keep in touch with them up until the point where we’re ready to move forward.

[00:17:57] Carla: That’s a great service that, because I think, I think a lot of, I mean, gosh, I’ve done it myself, um, years ago when you were at college and you know, you’re 18 and you go into the bank and they say, oh, do you want a credit card? You like, yeah. And it just feels like free money at the time. And you know, a lot of us have been there and. Um, when I, when I used to work in a bank. A lot of the people working behind the desk were actually targeted to sell you credit cards and stuff like that. So, so, you know, and it put a lot of people in situations where, you know, they, they might think they can’t get that mortgage. So I love that you said that, that don’t be afraid to come forward, because I think some people are very embarrassed about that. And, you know, you certainly not on your own, um, with that and, and making those mistakes, you know, So it’s, you know, a lot of people have done it. 

[00:18:49] Lorraine: Yeah. My downfall was store cards, you know, when you’re going into Topshop in Oxford street at 18, and they’re offering you a bit of plastic to put all these clothes on, you know, it’s hard to resist, but it’s all a learning curve as well, you know? And it can, it can be fixed. You know, you can just work towards getting yourself out of that situation. 

[00:19:11] Carla: Yeah, definitely. And some people as well who have kind of got themselves in these situations when they were maybe 18 and now they’re 30 something and they’re still too afraid to find out about getting a mortgage. I you know, I just want to reiterate, you know, get in touch with Lorraine, because it might be that she’ll be able to do something for you. And like she said, you know, a bit of a plan in place. If not, don’t be embarrassed by it. 

[00:19:36] Lorraine: Yeah, certainly. Unfortunately, because of the world that we’re living in at the minute, there is a lot of people who have been in financial difficulty over the last year, um, you know, are kind of trying to get themselves out of it at the minute. So definitely speak to someone, don’t sit and panic about it or listen to somebody in the pub who tells you one thing, you know, speak to an expert. And then that way you can put a plan in place to sort it all out. 

[00:20:01] Carla: That’s brilliant. That’s brilliant. And, and, um, also then if, if someone is thinking of getting a buy to let, perhaps during maternity and they’ve saved up money, obviously I think a bigger deposit needs to go down on those or is that different for each lender again? 

[00:20:18] Lorraine: Yeah, it can vary the buy-to-let mortgages. Generally, you’re looking at by a 25% deposit, however, there are some lenders that will offer a 20% deposit and again, based around your circumstances. So if you are on maternity leave and you’re looking for your first, buy-to-let then thats assessed slightly differently, because if you’re a first-time landlord, they want to ensure that you’ve got funds in place to cover any rental voids. However, once you go on and you’re purchasing a second or third buy-to-let they’ll then work off the rental income. So the first buy-to-let, just is a little bit more intense in affordability. Cause they want to know that you’d able to cover it basically, but once, you’re on the, the buy-to-let ladder, and you’re you have numinous properties then they tend to work on the rental income.

[00:21:08] Carla: Oh, wow. That’s really good. And, um, you can, if you’ve got a business, like we spoke about a bit further back. If you’re on maternity leave and you’ve got a business and you, and you went, um, you opted for buy to let there are ways around that that are fully legal around tax efficiency, that they can do it as well isn’t there?

[00:21:28] Lorraine: Yeah, So you can purchase property in a limited company as well. So special vehicles, as well can be used to purchase properties so that you’re not liable for them. Um, so yeah, that’s something to discuss with your accountant, if you’re thinking about a buy-to-let property, discuss with, your accountant how they think is best for your tax situation.

[00:21:51] Carla: That’s great. So Lorraine then, um, just, just to finish off I know i’ve, we’ve gone through quite a bit there, but I think that’s really useful. Everything that we’ve covered there. Oh, one thing I did want to ask is it about protection, during maternity leave. I know we kind of covered protection, but I don’t think a lot of people are, are aware. They can actually get protection whilst they’re pregnant? 

[00:22:15] Lorraine: Yeah. And often you find it’s when you’re in that situation of becoming pregnant that you start thinking about all these different scenarios. So yeah, absolutely you can, and you can insure yourself for as much and as little as you want, we can tailor the insurance to your budget as well. So it might not be possible to get you as much as what you know, you, you should have in place say. But we can tailor that to your budget. So come to me with a budget and we can work round that and figure out where the biggest gap is in your life for protection. And we can work with that. So, yeah, it’s definitely about putting a plan in place for yourself. Think about how much you would need. I mean it’s awful to think about death, and things like that. But it’s a conversations thats so important because you don’t want to be in that situation and then have that worry on your shoulders. So just think about your budget, what you can afford to live on, you know, what you would need in the event of the worst happening.

[00:23:14] Carla: Yeah, exactly. And also, you know, think for yourself, but also your partner, if your partner was unable to work for any reason anymore, could you actually you know, pay that mortgage. Could you continue making those payments? You know, when you’re off on maternity leave, obviously statutory maternity is, is quite low. If something was to happen, you know, are your covered?

[00:23:37] Lorraine: Yeah. This is like statutory maternity pay is £151.20 a week for 39 weeks. So that’s not a lot of money, but when you’re, you know, are in that planning stage of. You know, you find out you’re pregnant and you think, right. Okay. I’m going to have six or nine months off work. It’s always good to work on a budget and write it down. And I actually heard something really interesting last week and it was about having money dates. So we all go out on date night, but have a money date where you sit down and you discuss your money and where it’s going and what you want to achieve. So whether thats saving for your pension, you know, have a think about what you want in retirement and how you’re going to get there and discuss that openly. And also another thing they suggested was discuss that around your children so that your children are, then able to know about money because obviously we’re living in a plastic world at the minute where everything is paid on card. And kids I find are not getting, are not understanding the value for money.

[00:24:42] So it’s really important to open up that conversation and have it with them, um, as well, so that they are aware of yeah if you save up x amount of money, you can get here, or what would you like to achieve? You know whether it’s just some toy that they are after. Let them save gradually and see the growth in money. And how, what you can achieve from doing that. But yeah writing it down is always best.

[00:25:06] Carla: That’s great. It’s funny you say that actually me and my husband do, do do that and go through everything. And it is, is a case of just kind of keeping on top of things really, because you can be paying for things and, and you haven’t used them for so long, so really, really important to do. And also, like you said about the children actually made me giggle a little bit. My, my son has just handed me, um, a letter for Father Christmas. And I think it’s got listed on every single Smyth’s toy going. So he doesn’t know the value of money. I was like listed you can only have one, no, Santa brings everything. I thought this is just brilliant. So, so yeah, having a, having a clear, clear chat with you with your little ones about money, I obviously need to do that more is, is important. 

[00:25:51] Lorraine: Yeah. So, so actually, when you’re talking about Santa and money apparently, for every pound that the toy costs, it takes an elf a minute to make. So they can’t have really expensive toys. Cause the elves don’t have enough minutes to make all those expensive toys. 

[00:26:08] Carla: Oh, yes. I didn’t think of that. So I will be, uh, I’ll be reporting that back later. Thank you for that. If someone wanted to get in touch with you, you currently are offering free advice aren’t you. 

[00:26:20] Lorraine: Yeah. So the initial conversation is all at my own costs because I want to know that I’m able to help you before we charge a fee. So I’ll be speaking to clients for two years before I have had a penny out of them, you know. We put all this plan in place and we don’t charge anything until the point of mortgage application. So at that stage, you would have found a house, offer been accepted, and you’re ready to go ahead and start the mortgage. And it’s at that stage that we charge our fees. So if you just want to discuss something, you know, you want to discuss bad credit, buy-to-lets anything like that. Then please feel free to contact me and we can have a chat about it. 

[00:26:59] Carla: That’s brilliant. Lorraine, would you mind just telling people where they can find you and how they, how they are best contacting you at the moment?

[00:27:07] Lorraine: Yeah, so I can be found on Facebook Lorraine Collie Zing Mortgages and, or you can contact me via phone or my email address, which I believe is on the advert is that right? 

[00:27:19] Carla: It is, and I’ll pop all those details on the bottom of this podcast as well. So anyone that’s listened to this, if you just want to kind of scroll down. You’ll be able to see all of Lorraine’s details there. So you can make contact with her right away. Yeah. I highly recommend you speak to Lorraine and she will be able to help you with everything that we’ve discussed. So thank you so much. 

[00:27:39] Lorraine: Thanks for having me, Carla. 

[00:27:40] Carla: Thank you. 

[00:27:44] Thank you for listening to My Bump 2 Baby’s Expert podcast. If you would like to find help and support from experts in your local area, head over to www.mybump2baby.com and you will also be able to find local pregnancy to preschool groups, classes, businesses, and services in your local area.