Remortgaging whilst on maternity leave can cause confusion and worry if you’re not sure how to approach this, so we’re going to run through why this might affect your application and the approach we recommend you take.
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Why does being on maternity leave affect my mortgage?
As a mortgage is directly linked to how much money you earn, your lender has to take into consideration things like maternity leave, when carrying out affordability checks on you. When you’re on maternity leave, your income is often reduced after a certain period of time which puts you in a different financial position. But this doesn’t mean that you won’t be able to remortgage.
It really does depend on the lender as to what evidence you might have to provide, and how this might affect your mortgage application. For instance, most lenders won’t directly ask if you’re currently on maternity leave or are going to be soon. However, they will ask questions about your future plans, so you should be upfront and honest with them, especially as they’ll be asking to see payslips that will show if you’re receiving maternity pay from your employer. Being honest with your lender is important and keeping things from them can be classed as ‘non-disclosure’, which you don’t want to happen.
Once you tell your lender, they may ask to see what your payslips were before you went off on maternity leave. They might also want a letter from your employer with your return date (if you’ve decided this yet), and what your salary will be on your return to work too. More often than not, this will be sufficient information for the application to go ahead.
