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While it is possible to buy a home while maternity leave, it can make your mortgage a little more complicated. To ensure a seamless process, make sure you know your rights and understand what documentation you need to provide to your lender.
Can I get a mortgage while I’m on maternity leave?
Yes, you can get a mortgage whether you are paid during maternity leave or not. Lenders are prohibited from considering whether they are pregnant or on parental leave when evaluating their mortgage applications.
Of course, when applying for a mortgage, whether on vacation or not, the lender will consider the ability to pay off the loan. However, if your lender can confirm that you will return to work in the same or similar pay position after your leave, then the time from your job should not be an issue. Also, if you are applying for a co-home mortgage with a partner, your income will be part of the equation.
“All lenders need to decide that the income they use to qualify for a loan is stable, predictable and likely to continue,” says Casey Fleming, a Silicon Valley-based mortgage advisor and author of “Loan Guide: How to Get the Best Mortgage Can Be.” “This means that most lenders will approve and close the loan as long as the employer has written confirmation that they can resume their previous or similar positions or similar positions as soon as maternity leave is over.”
Most lenders would also want a documented return date, Fleming said. Some lenders may need to prove you’ve returned to work by providing at least one post-leave salary stub.
If your vacation is even partially paid by your company or a short-term disability provider, make sure to document this income. Lenders can take that into consideration when applying for your mortgage.
What documents do I need to obtain a mortgage while I’m on maternity leave?
Applying for a mortgage requires many documents and even more documents during maternity leave. Here’s what you have at hand:
- Bank statement and payment stubs for at least 30 days before taking maternity leave
- Tax returns including W-2 from the past two years
- Recent Investment and Retirement Account Statements
- Latest loan statements for cars, student loans, and more
- Short-term Disability Statement (if received)
- If received, a paid family leave statement
- Statements of other sources of income, such as support for children and spouses
- Employer contact information for verification purposes
- Includes letters from employers that record employment status and wages, and expected date of return to work
- There will be a re-return date to work that matches the letter of explanation detailing your situation, employer documents
- If applicable, a down payment gift letter
- Information about other real estate properties, if applicable
How to report housing discrimination on maternity leave
If your mortgage lender needs some additional documentation to prove your income during maternity leave, that is not necessarily the cause of the alarm.
However, “refusing a woman to approve or refinance a mortgage while pregnant or maternity leave violates the Fair Housing Act’s prohibition against gender and family status discrimination, according to the Urban Development Authority, which enforces the law.”
If you believe your mortgage lender is in violation of your rights, please file a complaint with HUD. The agent will investigate your claim for free.
- To file by email, print and fill out this form, follow the instructions to submit it.
- To submit by phone, call 1-800-669-9777 and talk to your intake specialist.
- To submit online, please use the HUD website.
HUD has fined numerous mortgage companies for discriminating against pregnant people and those on their father’s holidays, including a $5 million settlement with Wells Fargo in 2014.
Tips for applying for a mortgage while on maternity leave
- Shopping. Different mortgage lenders charge different fees and fees, and some may have more experience with borrowers with their own income environment.
- I’ll work with Mortgage broker. Rather than treating lenders directly, consider engaging in a mortgage broker who can buy loans on your behalf. “Some lenders are more conservative than others and lending to someone on any type of leave is inflexible,” Fleming says.
- Try to time the closure. If possible, set a deadline before you begin.
