Families with children penalised by mortgage lenders

September 29, 2016 by Brendan

Home owners

Couples who have children are being offered lower mortgages than those without, according to recent research.

Research conducted by ThisisMoney.co.uk indicates that families where both parents are employed are being penalised by lenders, who offer less for a mortgage. Borrowers who have a nanny, pay school fees or their children attend nursery, are being offered less than a couple who don’t have a family. The investigation carried out by ThisisMoney.co.uk revealed that parents who send their children to a private school are also being hit by the rules. If a borrower pays monthly school fees of £1,343, they will be able to borrow £150,000 less.

The report also revealed that a parent who takes paternity or maternity leave will be asked to prove when they are due to return to work, which has to be within three months of the birth of the baby. If unable to prove their return to work, they will be offered much less for their mortgage. According to experts, this is a shock to those who are trying to buy their first property, or move up the property ladder.

Since 2008, lenders have been given a new set of criteria to follow, and this will include checking how much people spend on takeaways every month, as well as TV packages, gym memberships and holidays. If you have less left over at the end of each month, you will be offered a lower mortgage.

If considering purchasing a home, check with a CeMAP qualified mortgage adviser to see how much you will be able to borrow.