Mortgage Application Query

Hi,

Hopefully a straightforward query.

Most banks have a line with the below in the appliation form:
Are you aware of any known future changes to your circumstances which may affect your ability to repay the proposed mortgage?

We are a couple in our mid 30s with no children. We do plan on having children. Mortgage will be dependent on both incomes but my wife has full maternity pay in her T&Cs and has no intention of giving up her career so I don't see that it will affect our ability to repay the proposed mortgage.

So do we have to explicitly answer yes to this or do the banks just make assumptions regarding couples anyway?

Say no.
Being expected to say whether you plan to have children is probably not what the bank mean. If the bank have a query they can ask you directly.
If you are happy you can afford with childcare costs etc then work away.

That must be new, I have never seen that sort of question on a mortgage app form. They are probably looking for more like are you changing jobs etc rather than children.

When applying for our mortgage last year we were 6/7 months pregnant with our first child so we obviously disclosed same when addressing that question. They deduct X amount from your net income for each dependent child when determining your repayment capacity. Can't recall exactly what X is, may have been in the region of 800/900 euro. Probably varies from bank to bank. Technically if your not pregnant then I would imagine for that particular scenario the answer is no. Obviously it would be prudent to factor this in for yourselves when looking at repayment amounts.

P.S. Amount deducted for a dependent child in our case may have been based on our particular set of circumstances. It may vary with where you live, i.e. childcare costs, if both parents are working, etc.

Generic Name said:

They deduct X amount from your net income for each dependent child when determining your repayment capacity. Can't recall exactly what X is, may have been in the region of 800/900 euro. Probably varies from bank to bank.

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The Insolvency Service essential expenditure guidelines are useful here although you are correct - the banks probably have their own guideline figures (BoI definitely do and my recollection is that they are slightly higher than the ISI's). Once they work out your essential expenditure they look at what's left in the context of mortgage repayment affordability. Nothing that a prudent borrower shouldn't be doing for themselves anyway.