Guest post by Pete Mugleston, Online Mortgage Advisor
These days it’s much more common for parents to spend periods of time away from the traditional office. Research by Online Mortgage Advisor (OMA) shows a third of people take a break at some point in their career and parental leave is becoming increasingly more common amongst men, as well as women. Whether it’s the mum-preneur or the stay-at-home dad, there’s a new kind of normal homeowner in town.
Despite these modern-day work circumstances, nearly one in fifth (20%) of those on parental leave couldn’t find a mortgage to suit their circumstances. Parental leavers can find that only their current earnings are taken into account, which can stand at £140.98 a week on statutory maternity leave.
To maximise your chances of getting a mortgage, there are a few things you can do:
Budget, budget, budget. The amount of deposit you’ll need to get a mortgage when pregnant or on maternity leave, really depends on your overall situation. Typically, the larger the deposit and more time that has passed since those bad credit issues happened – the higher the chance of getting a mortgage using your maternity leave income. You have a much better case borrowing at 50% loan to value (LTV) than if you were borrowing at 95% LTV.
Get your paperwork in order
If you are currently applying for a mortgage on maternity leave then be mindful that many lenders won’t take your full income into account, however there are lenders out there who are more than happy to consider your full salary. Just as long as you can get evidence from your employer, like a reference or a letter confirming the following:
- That you’ll definitely be going back to work
- The projected date you’ll be going back
- The terms of work you’ll be going back on. i.e. if your hours and salary are going to be the same. If full hours and normal pre-leave income, then great
- If you’re self-employed, most lenders will base their figures on you year-end accounts
Store up your holiday
Whilst you can’t plan your pregnancy totally, you can store up your holiday so that you can add it onto your maternity leave. This means you can potentially take four weeks off before you maternity leave kicks in.
This doesn’t just apply to mortgages. These days, websites like Energy Helpline or USwitch mean you can save hundreds of pounds on household bills and they’ll do all the work for you. You can check you’re on the cheapest rate for everything from your TV to your credit card to your utility bills.
Get the right advice
There’s a common misconception amongst non-homeowners with 35% assuming they don’t earn enough or otherwise ineligible to get a mortgage, yet often they’re just not looking in the right place for the right financial advice. Online Mortgage Advisor is on hand to find the right broker, whatever your circumstances.