As anyone who’s ever gone through the home buying process or the process of refinancing a mortgage, the steps to buying a house aren’t always straightforward and simple. This especially applies to income earners who plan on switching jobs, quitting, or taking temporary leave. For instance, a mother-to-be should not have more trouble than a regular individual in buying a house. After all, having children and a place to rear them in would logically seem to go hand in hand. Not so, according to the lenders, apparently. Pregnancy and maternity leave make it far more complicated to take out a mortgage loan, so it’s important to have the right advisors working with you, when going through the process. First off, make sure you’re working with a broker, mortgage broker, and real estate agent who come with good credentials. Secondly, read on to learn more about how such a situation should be approached.
Applying for mortgage before maternity leave
If you’re a working mother who’s thinking both of applying for a mortgage, as well as of taking time off for maternity leave, you should know right from the start that your situation will be complex. You will have to work on very tight deadlines to make that loan happen, for several reasons. The most important aspect weighing into the situation is that banks don’t regard the short term disability mothers receive while on maternity leave as regular income. In fact, disability income does not count as income at all, for the bank that you’d be applying for mortgage leave. As such, even if you are gainfully employed and receiving a salary at the time that you file your application, if your situation changes before the loan is closed, the lending process is stopped dead in its tracks. It can only be resumed upon you receiving your next paycheck.
Is there a way out of this situation, or does an expectant mother have to wait until she returns to work before her mortgage is re-approved and closed? The short answer is that it can be done. The long one is that the entire process needs to be expedited. In a nutshell, the applicant and his or her mortgage broker need to do everything in their power to close the deal before the future debtor even gives notice of leave. That’s because lenders have the habit of checking with your employer, within a few days before the closing or sometimes even on the day of the closing. Since they want to verify employment, you will need to delay the notification to the HR if you are taking the time off. If the bank calls the HR department of the company you’re working for and someone discloses that you are taking time off, this will automatically trigger a mortgage denial or suspension of the loan.
Communicate your goals clearly
The best way to secure a mortgage loan is to learn more about how to save for a house. However, if that’s no longer an option for you, for any given reason, then at least make sure that everyone you are working with (real estate agent, attorney, mortgage broker) is aware of your deadlines. This way, you’ll have everyone working as a team to make sure things are done in time.