Borrowing on Maternity Leave

[jackbak]

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

 

[Aaron_C]

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.

 

[Peter_Tersteeg]

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.

 

[Kinnon Bell]

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

 

[Jamie M]

Some lenders will take into account mat leave for servicing.

Just had one go formal last week.

Cheers

Jamie

 

[jackbak]

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.

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

 

[jackbak]

Some lenders will take into account mat leave for servicing.

Just had one go formal last week.

Cheers

Jamie

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.

 

[Aaron_C]

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.

But many don't...

 

[jackbak]

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

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

 

[jackbak]

But many don't...

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

 

[jackbak]

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.

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

 

[Jamie M]

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

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

 

[Aaron_C]

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

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.