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It’s possible to get a home loan while on maternity leave. The process may involve your lender verifying your “temporary leave income,” your regular income, and your agreed-upon date of return. Anyone on a standard temporary leave is considered employed, whether the absence is paid or unpaid.
Read on to learn more about buying a home while pregnant and how pregnancy impacts your ability to get a mortgage.
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Key Points
• Consider waiting to buy a home if you’re pregnant, as moving itself can be a stressful process.
• The Family and Medical Leave Act (FMLA) gives eligible employees job protection and up to 12 weeks of unpaid leave a year.
• If you apply for a home loan, the lender may contact your employer to verify your employment status and income.
• The lender may approve your mortgage if your employer verifies in writing that you will return to your previous position or a similar one after your maternity leave.
• Getting a home loan while on maternity leave depends on your income, savings, work return date, and credit history.
Buying a House While Pregnant
Hey, why not take on two of the biggest life stressors at once? Sometimes it just happens that way, with parents preparing for a baby and a new home.
First, consider if you can wait until later to buy a home. This may reduce your overall stress levels during your pregnancy and avoid the added pressure of a deadline that may lead to hasty decision-making.
And unless an employer is covering moving expenses, add that sizable cost to all the rest.
But if the move can’t be avoided because of a job relocation or other circumstances, it may be important to find a home before the baby arrives. There may be a silver lining: Saving for a down payment later on could interfere with goals like saving for a child’s college tuition.
Another possible benefit to buying a house while pregnant is that the relocation could lead you to a better school district or area to raise your child.
Ultimately, the decision whether to buy a house while pregnant is personal.
đź’ˇ Quick Tip: Want the comforts of home and to feel comfortable with your home loan? SoFi has a simple online application and a team dedicated to closing your loan on time.
What Is the FMLA?
FMLA gives eligible employees job protection and up to 12 weeks of unpaid leave a year in the event of:
• Childbirth
• Adoption or foster child care
• Care for a spouse, child, or parent with a serious health condition
• A personal serious health condition
• Qualifying exigencies arising from covered active duty or “call to covered active duty status”
In the case of childbirth, the FMLA guarantees that an employee can return to their job or an equivalent one after pregnancy and that they’ll receive health care benefits during their leave.
Employees are eligible if they work for a company that has 50 or more staffers and have completed at least 1,250 hours of work in the previous year.
In addition to the FMLA’s 12 unpaid weeks off, more and more states are enacting paid family leave laws. Currently, 13 states plus the District of Columbia have made this mandatory. And your employer may cover your pregnancy, childbirth, and recovery thanks to short-term disability insurance benefits, which are a percentage of your normal earnings.
Recommended: How Much Does It Cost to Adopt a Child?
How Maternity Leave Impacts a Mortgage
Before diving into the nuances of maternity leave and its impact on qualifying for a mortgage, here’s a quick refresher course on the home-buying process.
Mortgage approval from a lender primarily hinges on two factors:
• Creditworthiness: How likely is the borrower to pay back the loan, based on their credit history?
• Ability to pay: Does the borrower generate enough income and have a suitable debt-to-income ratio to make the monthly mortgage payments?
The lender may contact the borrower’s employer to verify their employment status and income.
There are several income-related factors that impact a pregnant borrower’s ability to get a home loan. Consider the following points:,,
• As long as the lender can verify that the borrower is employed — recall that someone on temporary leave is considered employed — and generates enough income to cover the mortgage, it could be enough.
• Expectant borrowers aren’t legally required to disclose their pregnancy to a lender. However, the employer can tell the lender about impending maternity leave when they call to verify employment status.
• If a borrower is going on unpaid leave, the period without pay may qualify as a financial hardship, which a borrower is required to inform a lender of.
• The lender can’t assume the mother-to-be won’t return to work after maternity leave. In fact, lenders assume that the mother will return to work after maternity leave and continue bringing home paychecks.
• Before loan approval, the lender will ask the borrower for written notice of her intent to return to work and may ask for an expected return date.
• The mortgage lender may request a tax slip from the last calendar year if the borrower is a salaried employee.
• The lender may approve the mortgage if the borrower’s employer verifies in writing that the borrower will return to their previous position or a similar one after their maternity leave. The lender will also consider the timing of the first payment.
• If the borrower will have returned to work by the time the first mortgage payment is due, the lender can consider regular income in qualifying for the mortgage.
• If the borrower will return to work after the first mortgage payment due date, the lender must use the borrower’s temporary leave income or regular employment income (whichever is less) and may add available liquid financial reserves.
• VA loans don’t count temporary leave income toward qualifying for a mortgage.
Should I Buy a Home While on Maternity Leave?
Those who qualify for a mortgage while on maternity leave may ask themselves, “Should I buy a house while on maternity leave?”
As mentioned, moving can be an incredibly stressful process, pregnancy or no pregnancy. And even if you have a budget for a baby, life has a way of throwing surprises at you.
Homeownership can also come with financial surprises. Most homeowners report paying for an unexpected repair within the first year.
Having a child and buying a home require saving some significant cash. Through careful budgeting, it is possible to do both simultaneously. It’s your call. Just remember that taking the double plunge could give you time to review what you need to buy a house.
Recommended: First-Time Homebuyers Guide
The Takeaway
Pregnancy is not a legal limiting factor in the case of a mortgage, but getting a home loan while on maternity leave depends on your income, savings, work return date, and credit history.
Whether you’re on temporary leave or not, it may be worth taking a look at your home loan options.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
Does being on maternity leave affect getting a mortgage?
It can, but only with regard to a homebuyer’s reported income. If buyers anticipate an unpaid maternity leave, they may need a sizable savings account.
Should you buy a home on maternity leave?
Buying a home while on maternity leave depends on your family’s needs and finances. But moving can add more stress to taking care of an infant.
Who does FMLA cover?
The Family and Medical Leave Act provides 12 weeks of unpaid, job-protected leave per year for eligible employees in the case of childbirth, adoption or foster child care, or care for a spouse, child, or parent with a serious health condition, for example.
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