Getting a mortgage while on maternity leave

Getting a mortgage while on maternity leave in Ireland is not as straightforward as it sounds, but if you plan it all, it may not be as much of a problem as it could be.

Your mortgage provider is only interested in knowing that you can meet your monthly repayments. Once you can show that everything is in order and you can meet your outgoings, there will not be any worries.

Being on maternity leave can affect your income, and the bottom line is that income patterns are all that matter to your mortgage provider.

Let’s take a look at getting a mortgage while on maternity leave in Ireland.

Mortgage providers are always looking for concerns and red flags that may indicate problems with repayments. In an ideal world, going on maternity leave should not be an issue, but unfortunately, it can be these days.

If you are planning to go on maternity leave before taking out a mortgage or if you are on maternity leave while applying for a mortgage, you will need to provide a few documents to keep your mortgage provider happy.

Documents your mortgage provider will want to see:

When you can show the mortgage provider that all considerations are covered and that going on maternity leave is not an issue, they will be happy to approve the mortgage application.

In all these situations, or potential situations, you should discuss maternity leave with your mortgage advisor before making any decisions.

If you can take a few precautions before considering maternity leave, you could make applying for a mortgage a lot easier for yourself.

Among the steps to take in advance:

Going on maternity leave is a great time in your life. You will be getting six months off work to be with the newborn and all the joy that brings you. The last thing you need is a financial headache, such as problems with getting a mortgage or meeting repayments.

Plan ahead, discuss your maternity plans with the right mortgage advisor and see what benefits are available to you.

You need to know what both are regarding your proposed mortgage or remortgage before putting pen to paper. Knowing the interest rate tells you some of the cost of borrowing, but knowing the APRC tells you all the costs.

Interest rates are a great indicator of the cost of a mortgage, but not the only one. For example, does a quoted interest rate apply to you? Some interest rates only apply to higher mortgages, and in some cases, are only applied if you have a substantial deposit or if you have an excellent credit score.

A fixed interest rate will become a variable interest rate at some stage, typically after the first five years of a mortgage. Can you afford to pay what could be an increased interest rate over the remaining life of the mortgage?

When you have the APRC, you have a better idea of what you will be paying when you take out the mortgage. All your fees from day one are included in the quoted annual payment rate.

Charges such as an early repayment penalty or a missed payment penalty may appear in your APRC and should be considered.

Crucially, interest rate changes are factored in, which is vital when you switch from a fixed rate to a variable rate.

Interest rates are part of deciding on a mortgage, but the APRC is essential for making the final decision.

You will need to know all the ins and outs of maternity leave in Ireland in advance, so you are ready for when the time comes.

There is no point in trying to arrange maternity leave and apply for a mortgage while in the last weeks of pregnancy – the stress will be too much, and in all likelihood your application will fail.

Maternity leave benefits in Ireland:

Maternity leave payments are treated as taxable income by Revenue.

You will need to apply for each benefit via the Dept of Social Welfare, and they may take time to process your application, so have the paperwork in before time.

There are tax requirements to fulfil too, such as the number of weeks of paid employment and PRSI you must have paid, before you qualify for maternity leave benefits.

Check with your local Dept of Social Welfare office what your circumstances are, and what you may need to have paid in PRSI, before you consider taking out a mortgage while on maternity leave.

A MortgageOne advisor will tell you what you need and where to find out more details on your entitlements.

The best thing to do before applying for a mortgage is to sit down with a good mortgage advisor, regardless of whether you are planning on taking maternity leave in the near future or in a couple of years down the road.

The right mortgage advisor has been here before; they will know what to look out for, what the mortgage providers will want to see, or not see, and how to be prepared.

Your plans before applying for a mortgage while going on maternity leave:

In life, it is always good to have everything planned and ready for when you take the next step. In real life, though, it is not always possible to have all your ducks in a row at the same time.

Talk to your MortgageOne advisor well in advance of taking maternity leave and see how you can take the pressure out of getting a mortgage.

Contact MortgageOne today if you are planning on getting a mortgage while going on maternity leave, even if you are only playing with the idea. You will need all the advice you can get in advance so that you can have all the planning in place.

Our experts have the experience to help with preparing for getting a mortgage and how to do so while on maternity leave.