Colette Sexton, news correspondent at The Sunday Business Post, on why parents are at a disadvantage when it comes to mortgage applications.
There are a lot of nerve wracking moments in the quest to buy a home, but none quite match the gripping fear of handing over copies of your bank account statements for the past six months. Staring at those pages, your life is laid bare for potential lenders to judge. You begin looking at yourself through the strict eyes of a bank second-guessing every piece of your outgoing expenditure.
Am I going on too many brunches with the girls? Do I need an ASOS detox? How do I spend so much on my eyebrows? But one thing you should not have to question is the money you spend on your children. Unfortunately, it seems that being a parent can have negative consequences for your mortgage application.
While rental payments might help to prove to a lender that you are financially responsible, banks do not view creche fees in the same way. Ireland is in the middle of a childcare crisis. Creche fees here are extortionate and they are continuing to go up. The average weekly cost for full-time childcare is now €179, according to preliminary data from the independent agency Pobal. This was up €5.26 on the 2016/2017 school year.
All of that cash going on creche fees makes lenders baulk. Parents are caught in a catch-22 situation. If one parent works and the other stays at home to mind the children, they can’t get a mortgage. If both parents are working and they have to pay for creche fees, they still can’t get a mortgage. Not to mention single parent families who have their hands tied in every way.
What’s the answer? Well, since the recession financial advisors have been advising people to wait until after they get mortgages to have their children. That is the perfect world scenario.