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Child Item

Applying for a mortgage while pregnant

conf101

Just wondering if anyone can advise what being pregnant or having a child will do to the size of a mortgage I can get?

Myself and OH are expecting our first child this summer. We're also almost ready to finally apply for a mortgage (though potentially not before the summer). Do banks treat being pregnant or having a baby on a case by case basis or is there a pretty standard amount they consider as the cost of a child and they deduct that from the amount you can borrow (ie. 3.5 times your salary - X amount for baby = amount you can borrow)?

Thanks in advance

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Afroshack

They budget it at around 250 per month per child, plus 1000 for each adult. Whatever is left over per month is what you can afford to pay in a mortgage.

You should still be able to borrow 3.5 times your salary, but be able to account for how you will afford the cost of childcare and factor it into your monthly/weekly outgoings. They usually like to see 1000 per month left per adult and 250 per month left over for a child. So you will need 2250 per month for yourselves after the mortgage and childcare costs are paid.

conf101

Afroshack wrote: »

They budget it at around 250 per month per child, plus 1000 for each adult. Whatever is left over per month is what you can afford to pay in a mortgage.

You should still be able to borrow 3.5 times your salary, but be able to account for how you will afford the cost of childcare and factor it into your monthly/weekly outgoings. They usually like to see 1000 per month left per adult and 250 per month left over for a child. So you will need 2250 per month for yourselves after the mortgage and childcare costs are paid.

Excellent. That's exactly what I was looking for. Thanks

somesoldiers

If the 250 is likely to make a significant difference to the amount you need to borrow why not try and get the application in before baby arrives? You are under no obligation to declare a pending arrrival.
Beat of luck with both

conf101

somesoldiers wrote: »

If the 250 is likely to make a significant difference to the amount you need to borrow why not try and get the application in before baby arrives? You are under no obligation to declare a pending arrrival.
Beat of luck with both

My wife is sporting a pretty obvious bump. I'm not sure how successful we'd be

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nhunter100

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Maybe it depends on the bank, I've arranged 2 and in both cases someone from the bank wanted to meet my wife and I. Ulster and PTSB.

somesoldiers

conf101 wrote: »

My wife is sporting a pretty obvious bump. I'm not sure how successful we'd be

Regardless, if you fill out the form before the birth than you don not have to mention that you have a "drain on income", as one bank put it to me, on the way. Again only relevant if the 250 is likely to make a significant impact on borrowings.
Though some banks UB for 1 will consider child benefit as income.

Is your wife's income going to be maintained fully? Will her employer pay her fully during the maternity leave or will she be reliant solely on the government maternity pay? Am not sure how they handle this situation if for example they ask for 3 months pay slips and she has been on maternity leave for 3 months
It is certainly wise to consider all angles

BBMcQ

conf101 wrote: »

My wife is sporting a pretty obvious bump. I'm not sure how successful we'd be

No child will affect your mortgage approval until they are born. Full stop. If you get your approval before the birth, then you don't have to mention the birth unless asked if there is any major change to the application since approval when you go to closing stages.

bbari

We were in the same boat.
Forms were filled in before the baby was born and actually there's no place on the forms to mention if you are pregnant.

Secondly my wife didn't have to go to the bank (AIB).

Best of luck with everything.

dbagman

The only person we physically met throughout the whole process was our own solicitor. Dealt with a mortgage broker for a good 6 months and never met the girl. All email and phone. I wasn't even talking to the bank myself. All through the broker.

conf101

Thanks for all the helpful advice.

Wife is a teacher, so maternity won't affect her income.

I might try get approval before the baby arrives, but the problem is I don't think we'll be ready to buy by the time that approval runs out. We're most likely relocating from Dublin down the country, which means getting a lot of other ducks in a row first. We could be looking at this time next year before we actually make the move, which means any approval we get this summer will have run out.

I'm definitely gonna look into it though.

spaceHopper

My wife was having twins and we told the life insurance through the bank made no difference but that was 2012 and we were not borrowing to much. You won't be the first and last. I'd tell them it will probably make no difference and you don't want to be about to sign for them to find out and pull the offer better it happen now.

Michael D Not Higgins

Keep in mind the 250 per child is the minimum they deduct. Creche fees are usually on top of that.

machalla

I've just been in this position with EBS. It seemed completely irrelevant to them thankfully. We applied before our son was born. They never met my partner in person. I asked them if it would be an issue with extending the approval and was told it wasn't.

You may need a letter assuring them your wife is to return to work, that's about all.

Clashmore

We applied for our mortgage while I was on Maternity Leave and earning 1/2 pay and we were approved a bought a house while I was on unpaid Maternity Leave. I had a letter from work to say I was returning to work as was required for them to pay me. I also had a significant deposit saved which I think helped us.

Clashmore

flashforward

Clashmore wrote: »

We applied for our mortgage while I was on Maternity Leave and earning 1/2 pay and we were approved a bought a house while I was on unpaid Maternity Leave. I had a letter from work to say I was returning to work as was required for them to pay me. I also had a significant deposit saved which I think helped us.

Clashmore

What do the banks consider a significant deposit? 50k? 100k? More?

Or is it simply if your LTV is <80%?

Clashmore

We were first time buyers so only needed 10% deposit, but could have covered 20% if we needed to. Also had a record of saving over a number of years which has continued since taking out mortgage. We are not Dublin based so our money went much further.

Clashmore

conf101

Clashmore wrote: »

We applied for our mortgage while I was on Maternity Leave and earning 1/2 pay and we were approved a bought a house while I was on unpaid Maternity Leave. I had a letter from work to say I was returning to work as was required for them to pay me. I also had a significant deposit saved which I think helped us.

Clashmore

That's great to hear Clashmore, thanks. We have a good record of savings and will (hopefully) have a decent deposit too. We're in Dublin currently but could be looking at buying outside Dublin where our money might go further.

mickoneill31

We got ours last mortgage with ulster bank. The advisor came out to us and it was obvious that my wife was pregnant so I asked him about it. He said the application was being made now so it was our current circumstances (2 adults, no kids) that he was using.

LirW

I don't wanna be a mood killer here, friends of mine bought like 1,5 years ago. They're planning on having kids, she wasn't pregnant. They talked directly to the bank and she asked something about kids in the future and was immediately met with suspicious questions if she's pregnant and they the bank indeed does need to know. They ended up making an application that only takes a small amount of her salary into consideration, because she wants to stay at home for a while. Also he's a Civil servant on a decent salary. AFAIK they went with BoI and price point of the house was 360k.

Best of luck with the baby!

conf101

LirW wrote: »

I don't wanna be a mood killer here, friends of mine bought like 1,5 years ago. They're planning on having kids, she wasn't pregnant. They talked directly to the bank and she asked something about kids in the future and was immediately met with suspicious questions if she's pregnant and they the bank indeed does need to know. They ended up making an application that only takes a small amount of her salary into consideration, because she wants to stay at home for a while. Also he's a Civil servant on a decent salary. AFAIK they went with BoI and price point of the house was 360k.

Best of luck with the baby!

Not a mood killer at all. Thanks for the input.

The thing I don't get about it is, surely a majority of couples applying for a mortgage will have kids in the future. They may not have kids when they get the mortgage, but could well do a year or two after. It still impacts their ability to pay for the majority of the lifetime of the mortgage.

LirW

I agree with you, I don't get it either. It's a little bit of the thing of "hey why should I hire a woman, she could get pregnant at any stage" really.
The best thing to do is not mentioning anything kids when it comes to mortgage application, unless they're already around. Once children are around banks treat you differently. Go and apply for a mortgage now, you don't really have anything to lose and once the little one is around it will get more difficult (I'm talking from experience). Having AiP doesn't mean you have to draw down.