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Maternity Leave Mortgages

Lorraine Collie
/in /by Lorraine Collie

Disclosure: This article may contain affiliate links, this means at no cost to you, we may earn a small commission if you purchase a product through them.

Maternity Leave Mortgages

Today we are speaking to our expert mortgage advisor from Bishops Stortford Lorraine Collie from Zing Mortgages. Lorraine discusses everything you need to know about maternity leave mortgages.

Finances during maternity leave and mortgages

Whilst having a baby is an amazing experience- it can also be quite scary for working mums! You may be wondering, how will our finances be affected? What will they look like? Will you be able to manage money-wise?

There are lots of different ways you can try and save money whilst you are on less income.

Thinking of applying for a mortgage?

Since your income will most likely be reduced whilst on maternity leave- especially if you are only receiving SMP (Statutory maternity pay)- you may be worried about passing a mortgage lender’s affordability checks.

The good news is that mortgage lenders will most likely accept your return-to-work salary as your income- which means that you should pass the affordability checks regardless of you no longer receiving your usual full-time wage.

Are you thinking about reduced hours after maternity leave?

Of course, it may mean that you’ll face difficulties paying your mortgage if you are going to be on a reduced income for a long period of time which is why it is important to think ahead and take into account childcare costs when you go back to work.

We understand how difficult managing your finances on maternity leave can be- especially if you are committing to additional big financial outgoings, such as a mortgage.

Our Expert Lorraine Collie answers commonly asked questions on Maternity Leave Mortgages

Today we are joined by our trusted expert Lorraine Collie- from Zing Mortgages in Bishops Stortford- Lorraine answers everything you need to know about managing your mortgage on maternity leave.

What would I do if maternity leave and one full time wage leaves us struggling to pay the mortgage?

You need to contact your lender immediately, in any situation where you are struggling to pay your mortgage you should contact them directly and ask for help.  What arrangement they come to will be down to your lender and your specific circumstances, we’ve seen from the pandemic that they can help in times of need.

 

What are the different options when it comes to mortgage breaks and holidays?

This will depend on your lender and your individual needs.  I have seen them in the past offer payment holidays or switch you to an interest-only payment reducing your payments dramatically.  This is assessed on an individual basis and would have to be discussed with your lender.

Can I apply for a mortgage on Maternity leave?

Yes, the lenders won’t discriminate because you are on maternity leave.  Each lender has their own criteria surrounding this, more commonly they will ask for a return to work letter from your employer confirming your return date and terms you will returning on i.e same as before or part time.  If you are at the beginning of your maternity leave and only receiving Statutory maternity pay they may want to see savings to cover your income whilst off to ensure the mortgage payments would be covered.

 

Does maternity leave affect future mortgages?

No, unless you return on a lower wage then it shouldn’t effect any future borrowing.  If you do change your job/hours then you would be reassessed based on your new earnings for future purchases or further advances.

 

Can I re-mortgage whilst on maternity leave?

Yes, they won’t discriminate against you being on maternity provided you intend to return to work on the same terms.

 

Top tips for getting a mortgage during maternity leave?

You would be asked to show your last payslip prior to maternity, a return to work letter stating dates and terms of return and if you are on Statutory maternity pay you may be asked to show savings to cover the shortfall in earnings.

Is there a limit to how much I can borrow for a mortgage on maternity leave?

The affordability limits will vary lender to lender, you can work with your salary provided you are returning to work.

 

Will maternity leave impact joint mortgages?

Not unless your circumstances are to change and you are looking to renew or purchase further.

 

How do things work for me on maternity leave as a self employed mum-to-be?

Self-employed income works differently, currently they will assess your latest 2 years earnings and ask to see 3 months business bank statements to show the income is sustainable going forward, as this will be lower then they will request to see savings to cover the earnings whilst you are off.

Could I still apply for Buy to Let mortgages?

If you are purchasing your first Buy to Let property then your income is assessed as if you were purchasing the property for yourself as they want to ensure any rental voids are affordable.  If you are purchasing further buy to lets to add to your property portfolio then this will be assessed on rental income.

Get Mortgage Advice from a trusted Mortgage Lender

In all instances, it is advisable to contact an adviser to chat over your options.  The lenders change criteria constantly so talking to an adviser like myself will give you a overall view of the current market rather than looking at an individual bank.

Mortgage Broker with FREE advice

My initial consultation is free of charge as I like to know I can help you before charging a fee.  A quick chat over your options can give you that peace of mind going forward, whether that be now or in the future.  Planning ahead is key when it comes to mortgages so please call and chat over your future plans.

You can contact our expert Lorraine Collie for mortgage advice, check out her listing with us here.

7 Ways to Develop Your Career While on Maternity Leave

Louise McCamily
/in /by Louise McCamily

Disclosure: This article may contain affiliate links, this means at no cost to you, we may earn a small commission if you purchase a product through them.

While maternity leave should be spent caring for yourself and your new arrival, there are plenty of opportunities to work on your own development or career progression too.  

If you want to switch up your career or dive back into work as soon as maternity leave is over, we’re sharing a number of ways you can use your time off to propel yourself to success. Because having children doesn’t have to be the end of your career, mums across the world go on to enjoy lucrative and successful careers even with a baby in tow.  

There are very few times in adult life where you’ll have a year to focus on your passion projects without having to manage your job responsibilities. So why not seize the opportunity with these tips:  

Stay in the loop by heading to work 

In the UK, new mums are entitled to head into the office for up to 10 days during their maternity leave without losing their pay. Taking a few days to stay in the loop and check-in with employers is a great way to prepare yourself for when you go back full time (or part-time if you’re planning to reduce your hours for child care). This also helps you to feel a lot less overwhelmed when you arrive back.  

If your role involved particularly skillful responsibilities, nipping to work for the day can help you maintain your skill level so that you can dive right in when maternity leave is over.  

What’s more, maternity leave is the perfect opportunity to work on any improvements or ideas you’ve had for the company – this could help you bag a promotion when you’re back or secure your place as an integral part of the workforce.  

Take a course 

Whether you want to continue on your current career path or would like to pursue a second career that fits into your newfound motherhood schedule, taking a course is a great way to utilize your maternity leave.  

Motherhood can certainly change your perspective on the world and what’s important to you. And you may find that your previous role doesn’t quite fit in with your plans anymore. Alternatively, you might be ready to ask for that promotion you’ve always wanted and a new qualification you could cement your chances.  

Click here to find out about online nursing courses for both current and new nurses at Carson-Newman University. Nursing is a great career for new mums, as there is plenty of room for growth and flexibility around shifts. Many health organizations offer ‘parent shifts’, which allow nurses to work during the times their children are at school or being cared for. Of course, this is easier when the kids are a little older; however, there’s no time like the present to get qualified. Online courses tend to be pre-recorded, so you’ll have the flexibility to study around caring for your new bundle. And, when you get back to work, you can continue your studies in the time that suits you.  

Launch your own business 

If those late-night feeds have left you with plenty of time to explore other skills, or you’ve recently taken on a passion for knitting and making candles, maternity leave could be the perfect time to launch your own business.  

Whether you decide to create your own online store or want to move into consultancy and avoid your previous 9-5 daily grind, grab a notepad and get planning. Thanks to out-of-the-box e-commerce solutions, it’s now easier than ever to create your own online brand and build a website within minutes. You’ll have a lot of downtime during maternity leave to pour your heart and soul into your new venture, and who knows, you might not even need to go back to your old job.  

Use your parenting skills to develop your career 

Motherhood is the best and most challenging job you’ll ever have to do. And along the way, you’ll learn a huge number of skills. Everything from empathy, problem-solving, and communication will be learned and developed during those first few months of being a new parent, all of which are totally transferrable to your working life.  

Combine these new soft skills with your recently obtained maternity leave qualification, and you’ve got yourself a brand new, killer CV.  

Learn a new skill 

There are plenty of other skills you might’ve always wanted to practice that don’t relate to your work. We all have a long list of things we’d love to do but never get around to finding the time. Whether you’ve always wanted to learn to draw or fancy learning to play the piano properly, you can use your maternity leave to get practicing. There are also plenty of skills that can boost your career that can be taught via free online courses or YouTube tutorials. This can help you offer your employer something new when you head back to the office or might just give you the skills to create your own business.  

Work from home  

Although a Newborn can offer plenty of distraction, there is always the option to take work home and work remotely. If your company allows it, it might work out more cost-effective to take shorter maternity leave and work remotely to go back to full-time pay while still caring for your new baby. This will put the pressure off returning to the office until you’re fully ready and able but will help you stay in the business loop.   

Before attempting to work from home from the comfort of the sofa with the baby in tow, it’s a good idea to designate a small area specifically for work. The home office may have just been transformed into a nursery, but a small patch in the dining room or a desk in the bedroom will be just as effective for cracking down to focus on work.  

Find a coach 

Becoming a parent while also managing a career can seem hugely daunting for expectant mothers. Those that are worried about how they’ll cope with the change could consider finding a career advisor or coach. Mentors will be able to show their own experiences and help you navigate the new waters of the working mum. They’ll help you to create new plans and techniques to ‘have it all. There may even be the option to have a coach within your current workplace via HR. Speak to your employer about return-to-work policies and courses to help you manage anxiety and return at your own pace.  

Remortgaging on Maternity Leave

Siobhan Holbrook
/in /by Siobhan Holbrook

Disclosure: This article may contain affiliate links, this means at no cost to you, we may earn a small commission if you purchase a product through them.

 

With thousands and thousands of babies born each year in the UK, remortgaging whilst on maternity leave is a common concern. Remortgaging during this period can sometimes cause confusion and worry. If you’re having a baby, your life and your financial situation is likely to have changed a lot since your last application.

It doesn’t need to be a headache though. We’ll talk you through how and why being on maternity leave affects a remortgaging application and the best way to approach this to make sure you can successfully remortgage your home.

Why does being on maternity leave affect remortgaging?

How much you can borrow for your mortgage is directly linked to how much money you and your household earn. This is because all lenders have a responsibility to ensure that your total monthly income can cover all of your household’s financial outgoings, including your mortgage repayments.

Let’s say that your income is £40,000 a year. When remortgaging, lenders will make their affordability assessments based on that figure. When on maternity leave however, you’re likely to be on reduced pay for some or all of that period, which puts you in a different financial position. Lenders will need to make assessments based on this reduced income figure and this could make it difficult to meet their affordability criteria.

That being said, there are many lenders that will accept your income prior to going on maternity leave as long as they can obtain a letter from your employer stating when you will be returning to work and what those new terms will be. Remortgaging whilst on maternity leave is possible – you just need to find the right lender for you. To avoid a string of declined applications, enlist the help of a mortgage broker. We have access to the entire market and the know-how to find you the right lender for your situation.

How does being on maternity leave affect remortgaging?

This will depend a lot on a lender’s approach, and each is likely to be different. Some lenders might base their assessment on your maternity pay at the time, which reduces the amount they’ll lend you. Others might take your assurance that you will return to full time employment, at your previous salary, and that you have sufficient savings to tide you over.

A lender is unlikely to directly ask you if you are currently on maternity leave or whether you will be soon. You may be asked on your application if there are any circumstances that may affect your ability to repay a mortgage. Maternity leave certainly falls into this category, so it’s vitally important to be upfront and honest about this at the point of any application.

Keeping things from a lender can be classed as ‘non-disclosure’. Being on maternity leave does not necessarily mean that you will be unsuccessful in remortgaging, but providing false information or failing to provide material information is likely to have consequences.

How can I remortgage on maternity leave?

It’s a good idea to do what you can to show lenders that your decrease in salary is only temporary and you’ll soon be back to full salary. Give a lender confidence by providing past payslips as proof of income, current payslips to show that you are receiving maternity pay, and if possible a letter from your employer that details your return date (if that has been decided yet), and what your salary will be upon your return to work.

This may be enough information and reassurance for many lenders to go ahead with the application using your previous or projected salary. However, if you are going back to work on reduced hours, or into a different role, it’s important to remember that this is likely to affect your pay and therefore could have an impact on your affordability and borrowing capacity.

If your remortgage application is in the joint names of you and your partner, then lenders will make their affordability assessment based on the combined income of both applicants. It may be that the income of the one applicant remaining in full time employment is sufficient on its own to meet the bulk of the lenders affordability criteria, in which case the remortgage should be a fairly straightforward process.

If you are finding it difficult to get accepted with a different lender, then you may find it easier to move to a different deal with your current lender – a ‘product transfer’. You’ll already have an existing relationship and track record with your current lender and they will not need current wage slips.

What about if I’m self-employed?

Remortgaging on maternity leave when self-employed is a slightly different story. In these cases, most lenders will use your year-end accounts or SA302 to assess the level of lending that you will be eligible for.

Depending on your circumstances, the type of business you run and whether you have employees to run the business for you in your absence, you may be able to argue that your business won’t be very affected during your leave and therefore neither will your income. If however, your presence is essential to continue to generate the same level of business income, then remortgaging could be slightly more challenging.

Can I wait until I am back at work before remortgaging?

You don’t have to remortgage as soon as your mortgage term ends, so you could always wait until you’re back in full time employment. Just be aware that during the interim period, you may drop onto your current lender’s standard variable rate (SVR), which might mean you may be paying more than you were previously.

Once you are back at work and have a regular wage coming in you can remortgage to come off this rate and find a more suitable deal. Each lender will have a different approach to maternity leave and each applicant will have a different set of circumstances regarding their employment status and plans for the future.

When remortgaging on maternity leave, using the expert guidance of a mortgage advisor or broker means you can explore the entire market to find a lender and deal that works for your new circumstances. We at Mortgage Light will walk you through this process and do the deal-searching for you, meaning you can focus on the things in your life that matter most right now.

If you’re on maternity leave and confused or concerned about remortgaging, get in touch with us at Mortgage Light today. We’ve helped so many people just like you to get a suitable deal on their remortgage at this time.

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