Hi,
Asking for a friend (co-applicant) who is planning to buy their first home and is pregnant
Maternity leave can be taken at 14 weeks full pay or 28 weeks half pay and she’s planning to return to work after 6 months break.
Question is which option is better to get a mortgage approved if they only find the home after baby is born/start of leave
Regards
Some broker would actually require you to provide a letter with letter head indicating your return date.
The bigger issue is the incoming dependent and the possibility of a lengthy period off work.
I would not mention the pregnancy until it was too late. It's illegal for them to ask if you are pregnant or will be pregnant. Once it's all drawn up, feel free to waddle on in and sign.
Once bubs is born, they are free to penalise.
Ask the lender
Did you mean mortgage broker ? I was expecting I'll find some one here who can give this general advise
What you plan to do in the future is not relevant to the lender when applying for your loan. They will want evidence of current pay and evidence of employment, they cannot and won't ask what your future plans are, even if you are pregnant. Their only concern is if you can fund the loan with your current circumstances, anything can happen in the future.
We are going through this right now.
If pregnant:
The only question is Do you have any dependants?
If baby has arrived:
Your mortgage broker will find you a bank that accomodates. We are about to refinance to Bank of Melbourne. They will make you jump through a few extra hoops, like proving Centrelink income for the parental leave and a letter from your employer stating your position, wage and return to work hours.
I work for a bank and can only go by how I assess loans.
Firstly, you should be honest with the bank so your true affordability can be factored in or you are risking potential financial hardship down the track. Either way (before or after baby born) they should declare a dependent.
The maternity leave is a short term thing however returning to work may look different than before the pregnancy and this too needs to be investigated.
From a numbers point of view we look at the lowest income they will be on during maternity leave so to answer your question 28 weeks at half pay is actually better than 14 weeks full pay then 14 weeks no pay. This will also mean if they return to work part time they will still be able to support the loan or if full time they will have extra income to support the new family.
Starting a family is stressful enough without adding financial pressure into the mix.
Thanks ! This is really helpful especially the fact you banks look for the lowest income during maternity break
Good idea on being honest. I wonder how many people have lied about their mortgage application and are now getting screwed by the interest rate increases.
This is what you ask the mortgage broker, and their purpose is to help find a loan that works in the preferred circumstances.
In this case, I’d simply say I plan to return to work after 14 weeks at full pay. The lender doesn’t care if you change your mind and take a longer break as long as you pay the loan.