Applying For A Home Loan While On Maternity Leave: A Guide

Buying a home while you’re on maternity leave and away from work is possible, but you may have to jump through some additional hoops. You’ll need to be able to prove you’re able to afford the monthly mortgage payments, and you’ll need to provide your lender with some additional documentation.

Before you begin the process of applying for a mortgage while on maternity leave, it’s important to know your legal rights, the documentation you’ll be expected to provide, and if and how your borrowing power will be affected.

Can You Get A Home Loan While On Housing Maternity Leave?

Yes, you can qualify for a home loan while on maternity leave. According to the Department of Housing and Urban Development (HUD), an individual cannot be denied a mortgage due to maternity leave because that violates the federal fair law.

The same is true for paternal leave – denying someone a mortgage based on these factors is considered discriminatory. Everyone has a right to equal opportunity housing, whether you’re on parental leave or not.

However, your lender will assess your financial situation and whether you can afford to make the mortgage payment. Being approved for the loan comes down to whether you can make the monthly payments during the period you aren’t working.

You can boost your case for a loan by showing you can handle the repayment with paid maternity leave, a spouse’s income, or savings.

Documents Needed To Apply For A Mortgage While On Maternity Leave

If you’re buying a house on maternity leave, your lender may ask for additional documentation to verify your pre-leave income and your intention to return to work. This documentation can include things like your pay stubs from the last 3 months before your maternity leave began.

You can also include a letter from your employer verifying your employment status and that you’re expected to return to work once your maternity leave ends.

How Much Can You Borrow For A Mortgage When On Maternity Leave?

The amount of money you can borrow for a home loan while on maternity leave depends on your lender and your credit score. If your maternity leave is unpaid, your lender may have to use a lower figure when you go through underwriting.

This could affect the amount you’re eligible to borrow for a home loan, and your lender may offer less money than they would if you were working full-time. In some cases, it could cause your lender to turn you down for a mortgage on a property you would have otherwise been able to afford.

If you can show that you have a continuous source of income during your pregnancy, this will improve your chances of getting a higher mortgage. It will help your lender remain confident that you can repay the loan while on maternity leave.

Tips For Getting Approved For A Home Loan While On Maternity Leave

Here are a few steps you can take to increase your chances of getting approved:

• Minimize your debt. The best way to boost your odds of getting approved is by improving your financial situation. Paying down as much debt as possible will show your lender you have the money to put toward a mortgage.
• Increase your savings. Your lender will likely understand that going on maternity leave is a temporary situation. But if you’re going into it with a substantial savings buffer, this will boost their confidence in your ability to make your payments.
• Find the right lender. Finally, working with the right lender can make all the difference. Compare lenders just like you would if you weren’t on maternity leave and look for someone willing to work with your situation.

Are You Required To Tell Your Lender You’re Pregnant?

No, you aren’t obligated to inform your mortgage lender about your pregnancy or about any plans to become pregnant when you apply for a home loan. Lenders also aren’t allowed to ask you if you’re pregnant or on parental leave, and legally they can’t deny you a mortgage just because you’re pregnant. But they will verify your income, so if you’re on a limited income for maternity leave, this could affect your ability to qualify for a mortgage and start the home buying process.

The Bottom Line

Buying a house while pregnant or on maternity leave can be a challenge, but it’s not impossible. If you take the time to find the right lender from the start, it will make the entire process easier.

Are you ready to plant some roots and purchase a home of your own? Take action and start your mortgage application online today with Rocket Mortgage^®.