If you are like me, when the wife decided to have another child and a larger place, the last thing you need to worry about is whether or not a lender will approve your home loan while on maternity leave. From a lender’s perspective, approving a maternity leave home loan represents a large risk, as you will be receiving minimal income for a period of time and there is a chance that you may not return to the workforce.
Some lenders will use paid parental income whether from your employer or the government parental leave while others will use a portion of this income and some not at all.
It’s also possible to obtain a loan while you are on unpaid maternity leave. This normally involves a letter from your employer outlining the terms of your maternity leave including your return date, future employment terms (part time or full time) and your salary upon return. An estimate of childcare and other related costs and evidence that this has been factored into your expenses.
A few lenders lenders will use actual future employment income in servicing if the application for finance is within 60 days of return to work.
While other lenders will allow this if you can prove servicing of the repayments while you are on maternity leave. For example if you have enough money in a savings account to cover your repayments and expenses for the period you are off. I have done this for several clients over the years after their existing lender has declined there application.
Most lenders don’t consider maternity leave payments as permanent and ongoing income. As a result, you need to be prepared as there will be some lenders that will not approve your application.
Your best course of action is to speak to a loan broker as they can leverage their network of lenders to find the lender to suit your purposes.
Loan Broker to the Aussie Battlers
0404 481 477