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Here’s Why Having Children Could Hamper Your Odds of Getting a Mortgage


Recently, the Coventry Building Society decided to go lax on some of its mortgage lending rules. At present, they are now allowing families to list child benefit as extra sources of income. Following the development, the mortgage application process is set to experience a new lease of life.

Coventry Building Society believes that the move could help bolster the maximum figures applicants could borrow. Those earning in the range of £25,000-£70,000 per annum are the most likely to benefit from the lending criteria

Importantly, not all lenders take into consideration one’s familial circumstances. This means that when one is applying for a mortgage and they have kids, that will be could be determinant in the figures one can borrow. Families eager to learn how lenders calculate mortgage affordability to boost the odds of getting a loan can contact Mortgage Advisers through 0800 2942849.

By including child benefit as part of the income sources, the Coventry Building Society has come to the aid of lower-income parents seeking to qualify for higher amounts. Child benefit is a form of payment made to parents from the government when one is taking care of a child under the age of 16. At times, the age varies to under 20 when one has a permitted form of training and education.

If one’s annual earnings fall below £50,000 per annum, the payments are usually tax-free. Those who qualify for child benefit receive £20.7 for their eldest child and £13.7 for each subsequent child. The payments are usually disbursed on a weekly basis.

The Big Question

A select number of mortgage lenders tend to be considerate when reviewing parents’ application forms. These lenders may take into account the family circumstances before approving just how much one gets

Some of the factors that may be looked into include child care expenses. Since these figures tend to be high on most occasions, they may decide to consider just how much they are able to allow individuals to borrow. If the situation is dire, they may simply opt not to issue the loan.

Notably, other lenders may be more lenient with the plight of borrowers who are expectant. To arrive at their figures, these lenders make calculations on mortgage affordability by making utility of national statistics. Often times when reviewing submissions, they tend to be generous in the loan amounts they give borrowers.

To boost one’s mortgage chances as a parent, there are three ways to go about it. The first involves conversing with a mortgage broker in order to gain insights on which mortgage lenders offer flexible services in the market. With this information, one can save themselves the dejection that can come from having numerous mortgage applications thrown in the bin.

Secondly, one needs to ensure that they claim all benefits they are eligible for, in order to bolster the figures they can borrow. To further enhance one’s chances of receiving higher amounts, the mortgage terms need to be reviewed afresh and extended.

Scenarios

Parents have been known to conceal the cost of childcare in order to boost their chances of landing a mortgage. Some parents have adopted cunning tactics in order to minimize their monthly expenditures. Lowering the working hours, dependence on free childcare from grandparents and asking family members and friends to pick kids from school top the list of cunning tactics employed.

While making a number of cuts to one’s expenses can be helpful in terms of improving the odds of landing a mortgage, honesty is always the best policy. This is because a couple of circumstances could arise and impact one’s ability to repay the lender. If left unchecked, this could have detrimental effects.

Mothers who seek to get a mortgage plan while they are pregnant can ably do so by doing their homework. Number one on the list of activities should be finding the perfect lender who is able to understand the circumstances. After that, an assessment of savings and a back to work plan needs to be formulated. That way, one can be better prepared in covering childcare costs.

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