How do banks treat maternity leave?

[brays]

Hi

We are expecting our first child in June, so I will go going on maternity leave in May, returning to work part-time somewhere between March and June 09. We want to start looking for the next IP once the current one is completed (we think sometime in April), but we are not sure how the bank will view my income if they need to take it into account. Do they take your income as it currently is, what it will be while on maternity leave or what it will be when you return to work?

Thanks in advance

Brays

 

[Qlds007]

Hi Brays

A lender will assess your serviceability as at the time of application.

For example if asked how many dependants do you have then at the time of application the answer could be "nil".

You income would be xyz and your borrowing capacity worked out accordingly.

In saying all of this you do have a duty to declare anything that may influence a lenders decision and bring this to their attention so the fact that you will likely be down to a reduced wage for 9 months or so will reduce the amount you can borrow.

This of course assumes that the Maternity Leave is unpaid leave.

 

[redsquash]

Only include your current status .
You do not know for a fact that you will be taking maternity leave.
You may get divorced before the birth
your baby may have complications and not be born......................sorry to be dramatic
You may get hit by a bus.

Unless you can predicate the future, stay with the present. It will make your loan application so much easier

 

[Peter_Tersteeg]

I'd suggest that you make the application given your circumstances today, but also make sure you've got contingenices in place for when your circumstances change.

You don't want to default on a new mortgage because you're looking after a new baby for a few months.