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A Guide To Applying For A Home Loan While Pregnant

Jamie Johnson4-minute read

April 27, 2022

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Being pregnant changes your life in many unexpected ways, and there’s a lot to plan for. And if you’ve been renting, learning you’re pregnant may inspire you to buy a home and start putting down roots.

But applying for a home loan while pregnant or on maternity leave comes with a whole new set of questions. Does pregnancy affect your mortgage application or the interest rate you receive?

Buying a home when you’re expecting can be stressful, but it doesn’t have to be. This guide will walk you through the process of buying a house while pregnant. 

Does Pregnancy Affect Your Mortgage Application?

When applying for a mortgage, your lender will verify your income and assets just like they would with any home loan application. If you’re pregnant, still working, and your income checks out OK, it shouldn’t affect your application.

However, if you’re on maternity leave or getting ready to go on maternity leave, this could affect your mortgage application. Your lender will also consider whether you’re on paid maternity leave or unpaid leave. If your maternity leave is unpaid, your lender will consider how this reduced income could affect your ability to pay your mortgage.

For instance, your lender may consider when your first mortgage payment will be due and whether or not you’ll have returned to work by that time. So, in short, being pregnant shouldn’t prevent you from taking out a mortgage, but you may have to jump through some additional hoops. That’s why it’s crucial to find the right mortgage lender.

Can Lenders Ask You About Your Pregnancy?

No, mortgage lenders aren’t allowed to ask you if you’re pregnant or on parental leave. And legally, they can’t deny you a mortgage just because you’re pregnant. But they will verify your income, so if you’re on a limited income for maternity leave, this could affect your ability to qualify for a mortgage.

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Can You Get A Home Loan On Maternity Leave?

Yes, you can qualify for a home loan while on maternity leave. According to the Department of Housing and Urban Development (HUD), an individual cannot be denied a mortgage due to maternity leave because that violates the federal fair housing law.

The same is true for paternal leave – denying someone a mortgage based on these factors is considered discriminatory. Everyone has a right to equal opportunity housing, whether you’re pregnant or not. 

However, your lender will assess your financial situation and whether you can afford to make the mortgage payment. Being approved for the loan comes down to whether you can make the monthly payments during the period you aren’t working.

You can boost your case for a loan by showing you can handle the repayment with paid maternity leave, a spouse’s income, or savings.

What Documents Do You Need To Provide When Applying For A Loan While On Maternity Leave?

If you’re buying a house on maternity leave, your lender may ask for additional documentation to verify your pre-leave income and your intention to return to work. This documentation can include things like your pay stubs from the last 3 months before your maternity leave began.

You can also include a letter from your employer verifying your employment status and that you’re expected to return to work once your maternity leave ends.

How Much Can You Borrow For A Mortgage When On Maternity Leave?

The amount of money you can borrow for a home loan while on maternity leave depends on your lender and your credit score. If your maternity leave is unpaid, your lender may have to use a lower figure when you go through underwriting.

This could affect the amount you’re eligible to borrow for a home loan, and your lender may offer less money than they would if you were working full-time. In some cases, it could cause your lender to turn you down for a mortgage on a property you would have otherwise been able to afford.

If you can show that you have a continuous source of income during your pregnancy, this will improve your chances of getting a higher mortgage. It will help your lender remain confident that you can repay the loan while on maternity leave.

How Can You Increase Your Chances Of Getting Approved For A Home Loan While On Maternity Leave?

Here are a few steps you can take to increase your chances of getting approved:

  • Minimize your debt: The best way to boost your odds of getting approved is by improving your financial situation. Paying down as much debt as possible will show your lender you have the money to put toward a mortgage.
  • Increase your savings: Your lender will likely understand that going on maternity leave is a temporary situation. But if you’re going into it with a substantial savings buffer, this will boost their confidence in your ability to make your payments.
  • Find the right lender: Finally, working with the right lender can make all the difference. Compare lenders just like you would if you weren’t on maternity leave and look for someone willing to work with your situation.

The Bottom Line

Buying a house while pregnant or on maternity leave can be a challenge, but it’s not impossible. If you take the time to find the right lender from the start, it will make the entire process easier. It may also help to take the time to learn more about the home buying process and how to get a mortgage.

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Jamie Johnson

Jamie Johnson is a Kansas City-based freelance writer who writes about a variety of personal finance topics, including loans, building credit, and paying down debt. She currently writes for clients like the U.S. Chamber of Commerce, Business Insider, and Bankrate.