Borrowing on Maternity Leave

Discussion in 'The Buying/Selling Process' started by jackbak, 7th Apr, 2014.

  1. jackbak

    jackbak Member

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    Hey ya

    Wife is going on 16 weeks full pay maternity leave in around 8 weeks time. We are hoping to purchase a property in the coming weeks and we have pre-approval sorted, if we do purchase, settlement will take place while she is on maternity leave. Does anyone know if the banks could/would reject our loan because she will be on maternity leave at the time?

    Thanks
     
  2. Aaron_C

    Aaron_C Finance Broker

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    I'm sure your broker would be able to tell you this? Anyway short answer is most lenders don't accept it if you have to rely on her income for servicing.
     
  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    I think it could be done, but my biggest concern would be how will you service the loan whilst one person isn't working? You need to make sure you've got realistic contingency plans in place for this.
     
  4. Kinnon Bell

    Kinnon Bell Member

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    When you got the pre-approval was the pregnancy disclosed (as foreseeable changes)/taken into consideration and the pre-approval based on this?
     
  5. Jamie M

    Jamie M Mortgage Broker - Oz Wide

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    Some lenders will take into account mat leave for servicing.

    Just had one go formal last week.

    Cheers

    Jamie
     
  6. jackbak

    jackbak Member

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    Of course. We wont have any problems servicing the loan.
     
  7. jackbak

    jackbak Member

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    I thought that might be the case as many people take maternity leave and then go straight back to work once the maternity leave is over.
     
  8. Aaron_C

    Aaron_C Finance Broker

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    But many don't...
     
  9. jackbak

    jackbak Member

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    Hmm, good question I'll check with my broker.
     
  10. jackbak

    jackbak Member

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    So that's why some lenders will take it into account and some wont??
     
  11. jackbak

    jackbak Member

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    Thanks. Im checking with my broker but always good to get a second opinion!
     
  12. Jamie M

    Jamie M Mortgage Broker - Oz Wide

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    Yeah it's not commonly accepted - I had one with Homeside at 80% LVR

    The deal required female applicants income for servicing - we had to show letter from employer stating expected return date, the amount of mat leave to be paid and a recent payslip.

    Cheers

    Jamie
     
  13. Aaron_C

    Aaron_C Finance Broker

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    Yes. I got one approved recently with ANZ with a maternity leave applicant but that required a few extra things and it wasn't mortgage insured. As a general rule LMI hates maternity leave income for the reason I listed above.