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Maternity leave and borrowing

Discussion in 'Property Finance' started by Joshwaaaa, 12th Feb, 2016.

  1. Joshwaaaa

    Joshwaaaa Well-Known Member

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    Adelaide
    Just after a second opinion here. Partner and I have been searching for a new ppor with the hope of getting into a place before she goes on maternity leave (mid April) which doesn't look likely to happen now.

    Our broker has told us no bank will go near us for our loan while she is on mat leave and we will have to wait until she is back at work in late Oct. She will be on full pay the entire time including a bit of annual leave and she has a return to work plan in place with her work.

    Will we have to wait it out or is there any other option? We need both our borrowing power and we would hate for the perfect place to pop up and not be able to do anything about it.
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    My experience suggests there are options For such a circumstance at least on the surface

    Have a chat with another broker

    Ta
    Rolf
     
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  3. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    True that a lot of lenders don't touch maternity leave income but there are some lenders that are happy to take it on provided that it makes sense. By that I mean:

    1. How are you going to cover the loan repayments until they get back to work?
    2. How long before she returns to work?
    3. Will she be paid maternity leave from the employer?

    A critical piece of documentation is the employer letter showing when she will return to work, the pay once she returns to work and whether its full time or part time. This document goes a long way and is crucial to "selling" the story.

    A few lenders that come to mind with good maternity leave policy are CBA, Firstmac, BoQ and Macquarie (they will take 50% of the income).

    Please note that with BoQ your wife may be back at work by the time they pick up your application.
     
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  4. ellejay

    ellejay Well-Known Member

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    Unfortunately, no you cant borrow any more seems to be code often for 'your case requires a little more work than usual and I'm too busy/can get easier jobs than yours.' Keep trying until you find the right broker. I've gone from 3 no you cant's to two offers to lend so it can be done.
     
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  5. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    5 months mat leave isn't a deal breaker. If return to work is less than 6 months into the future, some lenders will take half payments into servicing.

    You will need to demonstrate an ability to cover repayments until that point.
     
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  6. Esel

    Esel Well-Known Member

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    It might not be a bad thing to not have a mortgage commitment. You never know with pregnancy and babies how it will go and your partner might want or need more time off work.
     
  7. Redom

    Redom Mortgage Broker Business Member

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    Talk to CBA if she's currently earning income.

    You'll need to demonstrate how to make repayments if there's a gap in income, so an equity buffer would greatly assist. Need an employment letter detailing return to work date and terms.
     
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  8. Marty McDonald

    Marty McDonald Mortgage broker

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    I've done plenty of these and with some mums not returning for 12 months +. Just need liquid assets sufficient to cover any shortfall in servicing and the employment letter confirming return date, income on return and part time full time etc. If returning full time need to allow for child care costs or at least comment on how this will be managed..

    It's a bit of a speciality of mine I'm doing at least 1 and sometimes 2 a month.
     
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  9. Marty McDonald

    Marty McDonald Mortgage broker

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    I note the op also said will be paid leave. Even better but I find it easier if there is cash in bank
     
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  10. tobe

    tobe Well-Known Member

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    ANZ is the leader in this space IMO. They were doing it first, it's in policy (not by exception) and the process is simple. If your wife is still working, it's a payslip to show current income. In the application under future changes make some notes about the maternity leave plans and supply the employers letter as earlier described. Job done.
     
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  11. Joshwaaaa

    Joshwaaaa Well-Known Member

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    Alright brilliant, some really good information here, thanks to all. Sounds like seeking out another broker for a chat is going to be on the cards some time soon.


    This is no.2 for us, she had 9 months for the first and she's 100% 5 months will do her this time round.
     
  12. bob shovel

    bob shovel Well-Known Member

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    Just deal with a broker over the phone ;) business as usual
     
  13. Esel

    Esel Well-Known Member

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    ah, so youre pros!

    Congratulations on the new baby! : )
     
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