A growing family is a great reason to upgrade one’s living situation. However, expectant parents often face anxiety when applying for a mortgage. In this post, Broker Lisa McInnes of Verico Paragon Mortgage Inc. discusses several factors around a common question: How Do Pregnancies Affect Mortgage Applications?
How Do Pregnancies Affect Mortgage Applications: FAQ’s
A. Absolutely not. Your health status is confidential. However, parental leave often does affect a Borrower’s income, and if the mortgage application is submitted during a Borrower’s leave there is the risk that one’s employer will mention the leave during the employment verification process. If this happens and the Lender feels the margins around your household income are too small, they may decline to offer a mortgage.
That said, I have many Lenders who are happy to use the Borrower’s full income (based on either salary or a two-year average qualification) so long as the employer will confirm a return to work date on the employment letter.
A. It is not within your employer’s rights to tell a Lender of your pregnancy, but they do have the right to confirm if you are currently on leave from your current position.
People Also Ask:
A. The quick answer is no. It is illegal to discriminate due to pregnancy or health status, and most Lenders are very conscious of gender discrimination. That said, a mortgage is not considered a basic human right and it is at the discretion of the Lender as to whether they will extend a contract to the Borrower. If they have reason to believe your income will soon change (as it often does during parental leaves, when new parents make only a percentage of their usual wage), a Lender may choose to reject your application.
A. While it’s helpful to be upfront with your Mortgage Broker on many subjects, this fact isn’t necessary to share. If you tell me about your pregnancy, I will likely be super excited for your family, but it won’t affect how hard I work to help you meet your goals.
A. This factor can have a larger impact on eligibility than pregnancy as it can affect how a Lender gauges your income. In this situation a separation agreement is vital. If you are receiving child support, that support can sometimes be added as part of a Borrower’s verifiable income. However, if you are paying your co-parent child support, the Lender will factor that as income loss.
People Also Ask:
A. No. As long as you continue to meet your mortgage payments, the Lender will neither know nor care about your decision to return to work or exit the workforce after parental leave.
A. You can apply for a mortgage at any time during your pregnancy, but it is best to give yourself time to apply before parental leaves begin. This makes the whole process easier and gives you and your partner the opportunity to set up a beautiful nursery in your new family home!