Applying for mortgage when pregnant

bluebell01

Just a question. I'm pregnant with my first and we are looking to buy a house in the next year or so. Lots of people are telling me to apply for a mortgage before I look pregnant. I'm currently 3 months with no bump. Just wondering how much less money do the banks offer you with a dependant?

We are both working permanent jobs, on almost 90K between us, currently renting, no loans or car finance and we have at least 10% deposit saved depending on price of house. We will probably buy a house that is around 300-330K if possible and would consider a new build on the help to buy scheme. I'll get full pay for 6 months of my mat leave and will probably take the 3 months unpaid too. Baby will most likely be in creche when I go back to work which will cost around 850 per month. My partner is also due a promotion this year which will bring up his salary a good bit.

I know that mortgage approval lasts 6 months so even if we get approved in the next few months I'm worried that I'll have to disclose that I've a child when we reapply and they'll offer us a lot less. Can't see us finding a suitable house in the next few months and tbh happy where we are for now. But will need a bigger house once the baby starts walking. And we might aswell buy as we (think!) we are in a good position to. Just concerned that we won't get a good enough mortgage because of the baby!

Anyone have any experience of this? Thanks.

jlm29

I’m sure other people will have more of an idea, and it probably varies from bank to bank, but AIB told us that when they look at affordability, there has to be €1050 (or maybe €1025, it’s 18 mths ago now, so I can’t remember exactly) per adult to live on, and €250 per child after your mortgage is paid. I was on mat leave when we applied, and they also asked me how much my childcare would be when I went back to work.

zl1whqvjs75cdy

You'll need to wait for the husband's promotion to get the larger mortgage amount. So by going in now you may actually end up with less than if you waited for the promotion even with the baby.

bluebell01

donkeyoaty0099 wrote: »

You'll need to wait for the husband's promotion to get the larger mortgage amount. So by going in now you may actually end up with less than if you waited for the promotion even with the baby.

From what I gather we will still get enough (we don’t want to buy a house over 330k at the very highest, so the mortgage will be less than this) on our current salaries. We are hoping the house price will be more along the lines of 300k but house prices are a bit mad at the moment.

The question is whether we will get that amount when we have a dependant. We are not sure when the promotion will happen. Could be another year away but more than likely will be in the next 6 months. Hopefully sooner rather than later as it looks like it would solve this issue!

syndrome777

bluebell01 wrote: »

From what I gather we will still get enough (we don’t want to buy a house over 330k at the very highest, so the mortgage will be less than this) on our current salaries. We are hoping the house price will be more along the lines of 300k but house prices are a bit mad at the moment.

The question is whether we will get that amount when we have a dependant. We are not sure when the promotion will happen. Could be another year away but more than likely will be in the next 6 months. Hopefully sooner rather than later as it looks like it would solve this issue!

not sure how old you are?
but say you can, and you want to take out a mortgage of cca E300k over 30 years, when stressed tested it comes to E1800pm.

2 adults + 1 dependent requires around E2300 pm of NDI

you two are paid cca E6000pm - stressed tested mortgage E1800 - Creche E850 = E3350 NDI


even if you draw-down your loan when you are on unpaid maternity, all they want to see is a letter from employer you are going back to your salary and your commencement date.

bluebell01

syndrome777 wrote: »

not sure how old you are?
but say you can, and you want to take out a mortgage of cca E300k over 30 years, when stressed tested it comes to E1800pm.

2 adults + 1 dependent requires around E2300 pm of NDI

you two are paid cca E6000pm - stressed tested mortgage E1800 - Creche E850 = E3350 NDI


even if you draw-down your loan when you are on unpaid maternity, all they want to see is a letter from employer you are going back to your salary and your commencement date.

That's great info, thanks. Looks fine so. We are 29 and 28.

10pennymixup

Congrats on the baby.

witchgirl26

OP if you apply before you actually give birth then they won't stress test for a baby being costed in. The difference is once little one pops out, they will add a certain amount (depends on bank but usually around the €1,000 mark) per child so that can affect your borrowing. That's why a lot of people will tell you to apply before you have the baby but realistically unless you act on the mortgage offer before then, you are going to have to tell the bank if your situation changes (i.e. you have the baby) and they will recalculate at that point.

The banks could consider the promotion before it officially happens btw if you have a letter guaranteeing it. For example my friend got her mortgage as she was being promoted to a managerial position in her work (plus additional salary) but it was going to take 2 months before the promotion and salary took effect. She got a letter from work stating her start date in the new role and the guaranteed income and that worked for the approval in principle. When it came to full approval on the house they wanted to buy, it was a few months later and she was in the role so they just looked for a little more back-up from her then.

Congrats on the baby and good luck on the house search!

awec

Just be honest with the bank.

Babies cost money. A lot more money than the 250 quid the bank will budget. The only person you’re fooling by trying to hide it or apply early so you can avoid telling them is yourself.

Turkish1

bluebell01 wrote: »

Just a question. I'm pregnant with my first and we are looking to buy a house in the next year or so. Lots of people are telling me to apply for a mortgage before I look pregnant. I'm currently 3 months with no bump. Just wondering how much less money do the banks offer you with a dependant?

We are both working permanent jobs, on almost 90K between us, currently renting, no loans or car finance and we have at least 10% deposit saved depending on price of house. We will probably buy a house that is around 300-330K if possible and would consider a new build on the help to buy scheme. I'll get full pay for 6 months of my mat leave and will probably take the 3 months unpaid too. Baby will most likely be in creche when I go back to work which will cost around 850 per month. My partner is also due a promotion this year which will bring up his salary a good bit.

I know that mortgage approval lasts 6 months so even if we get approved in the next few months I'm worried that I'll have to disclose that I've a child when we reapply and they'll offer us a lot less. Can't see us finding a suitable house in the next few months and tbh happy where we are for now. But will need a bigger house once the baby starts walking. And we might aswell buy as we (think!) we are in a good position to. Just concerned that we won't get a good enough mortgage because of the baby!

Anyone have any experience of this? Thanks.

This is not advice, merely illustrating how I dealt with a similar situation twice in the last 3 years.

Was in a similar situation 3 years ago. Wife was pregnant but the forms only ask how msny dependants - we had none at the time and were approved as such. Just ensured that paid cash for baby related costs (cots, travel systems etc..)

Fast forward to this year, wife on unpaid mat leave with no2 and I was arranging to switch mortgage - I was asked about childcare situation, hadn't got it nailed down at the time but suspected we would end up with €1,500 in creche fees per month. We would have passed the stress tests anyway but it would have been a pain with additional documentation etc.. so I stated that i thought that the grandparents would be minding and no associated costs and was approved again.

'Looking pregnant' has zero impact. You never need to even meet the bank. Once you are fully approved they will not ask for updated bank statements etc.. unless you are applying again as the time ran out.

s4uv3

We got a mortgage last year while I was on maternity leave. Bank requested a letter from employer stating my return date and that my salary would remain the same.
We didn't look to borrow the max allowed though, so I'm not sure if that would have been taken into account...

mvl

bluebell01 wrote: »

I know that mortgage approval lasts 6 months so even if we get approved in the next few months I'm worried that I'll have to disclose that I've a child when we reapply and they'll offer us a lot less. Can't see us finding a suitable house in the next few months and tbh happy where we are for now.

thought some banks can do more than 6 months.

- my approval from aib was for a year last year.

bluebell01

10pennymixup wrote: »

Congrats on the baby.

Thank you!

witchgirl26 wrote: »

OP if you apply before you actually give birth then they won't stress test for a baby being costed in. The difference is once little one pops out, they will add a certain amount (depends on bank but usually around the €1,000 mark) per child so that can affect your borrowing. That's why a lot of people will tell you to apply before you have the baby but realistically unless you act on the mortgage offer before then, you are going to have to tell the bank if your situation changes (i.e. you have the baby) and they will recalculate at that point.

The banks could consider the promotion before it officially happens btw if you have a letter guaranteeing it. For example my friend got her mortgage as she was being promoted to a managerial position in her work (plus additional salary) but it was going to take 2 months before the promotion and salary took effect. She got a letter from work stating her start date in the new role and the guaranteed income and that worked for the approval in principle. When it came to full approval on the house they wanted to buy, it was a few months later and she was in the role so they just looked for a little more back-up from her then.

Congrats on the baby and good luck on the house search!

Yeah a lot of people I work with bought houses whilst expected a baby and they were giving me this advice. A few of them were a 1 income household though so it obviously affected them more. Great info on the promotion. And thanks!

awec wrote: »

Just be honest with the bank.

Babies cost money. A lot more money than the 250 quid the bank will budget. The only person you’re fooling by trying to hide it or apply early so you can avoid telling them is yourself.

I agree with what you are saying. We are aware (I think!) of how much it will cost but the rent we are paying and money we are putting into savings are a lot lot more than what a mortgage and creche will cost. Unless we wanted the very highest amount that the banks would offer us (without a child) it looks like we'll be okay.

Turkish1 wrote: »

This is not advice, merely illustrating how I dealt with a similar situation twice in the last 3 years.

Was in a similar situation 3 years ago. Wife was pregnant but the forms only ask how msny dependants - we had none at the time and were approved as such. Just ensured that paid cash for baby related costs (cots, travel systems etc..)

Fast forward to this year, wife on unpaid mat leave with no2 and I was arranging to switch mortgage - I was asked about childcare situation, hadn't got it nailed down at the time but suspected we would end up with €1,500 in creche fees per month. We would have passed the stress tests anyway but it would have been a pain with additional documentation etc.. so I stated that i thought that the grandparents would be minding and no associated costs and was approved again.

'Looking pregnant' has zero impact. You never need to even meet the bank. Once you are fully approved they will not ask for updated bank statements etc.. unless you are applying again as the time ran out.

Thanks for the advice. Yes, we will be paying for cash for baby things and will use my Mother's credit card and repay her after for online purchases. Planning to buy the bare minimum though. Yes some people have told me you never need to go to the bank and some have said you do. Probably depends on the bank.

s4uv3 wrote: »

We got a mortgage last year while I was on maternity leave. Bank requested a letter from employer stating my return date and that my salary would remain the same.
We didn't look to borrow the max allowed though, so I'm not sure if that would have been taken into account...

Thank you!

mvl wrote: »

thought some banks can do more than 6 months.

- my approval from aib was for a year last year.

Yes this is true. My colleague informed me of this. And looks like you can apply online too. They have good variable rates so this good be a good option. Thanks!

bluebell01

Just another question. Unrelated to the pregnancy but someone might have experience of this. Every month I have €700 in deductions on my payslip for my pension and employee share purchase plan. So this obviously brings down my net income. The shares are separate to my "normal" deposit savings which go into a credit union account from my bank account.

Just wondering should I stop my shares and pension for a few months to make my net income higher? Is this something they look at badly or is it seen as favourable long term savings (which it is!). Thanks.

astrofool

A male and a female are buying a property with greater than one bedroom. Banks know what will likely happen, and it's factored into their calculations, one way or another.

PattyO88

Applying for a mortgage when pregnant: five top tips:

* Find the right lender
* Explain your circumstances
* Assess your own savings
* Think about your return to work
* Factor in childcare costs

Reati

As noted, you do not have to tell the bank you are pregnant. You have to tell them of your dependents. An unborn child is not a dependent as yet and no where on the form does it ask are you pregnant.

Banks expect people to have children and it will be factored in the risk assessment already in one way or another.

What you need to do is figure out if you will taking the mortgage draw down before the baby arrives. If not you will have to tell them when you do have the baby. At that point, you might as tell them now then, as you don’t want to be seen to be trying to pull a fast one.

Being honest is best in dealing with banks imo.

witchgirl26

bluebell01 wrote: »

Just another question. Unrelated to the pregnancy but someone might have experience of this. Every month I have €700 in deductions on my payslip for my pension and employee share purchase plan. So this obviously brings down my net income. The shares are separate to my "normal" deposit savings which go into a credit union account from my bank account.

Just wondering should I stop my shares and pension for a few months to make my net income higher? Is this something they look at badly or is it seen as favourable long term savings (which it is!). Thanks.

Don't stop the pension payments - that's something they expect to see coming out of payslips as it's good financial planning. In terms of the employee share purchase plan - based on online calculators, does this affect your borrowing capability massively? I.e. putting in net salary rather than gross. If it doesn't, then leave it away. If it does, then maybe consider it.

The bank may ask to see something in relation to the shares (i.e. how many you have, do they vest at a particular time and have a set value at vesting etc) but not sure how they'll take them into account. Don't think it would go massively against you though unless they're in a very risky industry/business.