Need a Mortgage? Don’t Get Pregnant

Need a Mortgage? Don’t Get Pregnant
By TARA SIEGEL BERNARD
Published: July 19, 2010

Expectant parents shopping for a home are not the only ones concerned about the date of the baby’s arrival.

“Maternity leave or any other leave of absence often prevents a person from obtaining a mortgage,” said John Councilman, president of AMC Mortgage in Fallston, Md.


Mortgage lenders are taking a harder look at prospective borrowers whose income has temporarily fallen while they are on leave, including new parents at home taking care of a baby. Even if a parent plans on returning to work within weeks, some lenders are balking at approving the loans.

“If you are not back at work, it’s a huge problem,” said Rick Cason, owner of Integrity Mortgage, a mortgage firm in Orlando, Fla. “Banks only deal in guaranteed income these days. It makes sense, but the guidelines are sometimes actually harsher than they need to be.”

Back in the slapdash days of easy credit, lenders were more likely to overlook the fact that a parent was out on maternity or paternity leave. But now that lenders have become more conservative, they are requiring new parents to jump through more hoops to prove their income will be enough to cover the mortgage.

So before some prospective parents start spending their Sundays at open houses, they should be prepared to deal with some complications. They may have to delay the purchase, deal with the banks’ bureaucracy (and requests for extra paperwork) or buy a home they can afford on one salary.

“Maternity leave or any other leave of absence often prevents a person from obtaining a mortgage,” said John Councilman, president of AMC Mortgage in Fallston, Md. “There are some who long for the days when such strict proof of income was not required.”

http://www.nytimes.com/2010/07/20/your-money/mortgages/20mortgage.html?ref=business

Unemployment insurance should allow claims for maternal/paternal/sick leave, that allow some supplementation of income

We just received one year of it in Canada. It was a godsend. By no means is this policy bankrupting the country and making it uncompetitive.

Dress up in baggy clothes and they'll just think your fat.