Mortgage Experts Blog
Home Loans on Maternity Leave
It is common for new mums to take a period of time off to care for their newborn. At this time couples are also considering their future and often want to upsize into a home more suitable for a family.
Unfortunately a home loan and maternity leave often create an unexpected barrier in the loan application process. This is the case when the new parent receives maternity leave pay much lower than their usual income and needs the two incomes to service the loan. Some lenders are stuck in the stone ages when it comes to mat leave restrictions. They see this as a high risk loan as applicants must be able to prove they can make loan payments under all circumstances. However, some lenders are more flexible than others and there are some simple steps you can take to ensure loan approval.
* Maternity leave duration: Lenders need to see that you have enough in the way of buffer funds to provide for your living costs and commitments during the length of your maternity leave. They need to know that you aren’t being unrealistic and have accounted for the entirety of your leave.
- Your actual return to work date. Not your planned return to work date.
- Your tenure i.e. part time / full time / casual once you return.
- You income once you return i.e. if reduced to part time what your new annual pay will be.
2. Last few pay slips from before you went on maternity leave.
3. Sufficient liquid assets such as cash or shares to cover any gap between when the new mortgage repayments will start and when you will return to work.
4. A plan in regards to managing ongoing child care.
5. The cost of child care if applicable has been accounted for in your expenses.
The first step is to contact a suitable Mortgage broker such as myself who can ensure the loan process goes off without a hitch. I specialize in this area and have had loans recently approved when customers have been told by the direct channel or other brokers that it is not possible. Having 3 young kids myself I understand the situation! Call me today on 1300 711 054 to discuss your specific situation. I’ll be able to provide varying options that best suit your current circumstances.