We all know that babies can make life complicated and this fact is also true for loans. There are various stages which that all have different impacts on mortgage and loan applications.
During pregnancy it is a critical to plan for your maternity leave. Have you finances organised and have a funds buffer for once you’ve had your baby so you do not get caught out financially. It is better to obtain a loan while you are working rather than while on leave.
- Maternity Leave
Paid Maternity leave will be assessed differently for each lender. We will work with you to find a lender that suits your needs. Some people might only be paid half of their normal salary therefore banks do not look at your salary before leave. Government benefits will be taken into consideration however not usually at their full amount
Unpaid Maternity Leave – Most banks will look at this as unemployment. Even if you have a date of return to employment there is no guarantee that you will return. If you cannot service the loan without your employment that you will need to wait until you return to work before the bank will approve
We advise our clients to have a letter from their employer stating the terms of the maternity leave including – return to work date and the employment tenure upon return (full time, part time or casual)
- Now your have dependents
Once you have children your borrowing capacity is affected. The banks look at each child under the age of 16 as a dependent. This means that your ‘general living’ expenses will increase with each dependent. Each bank has a different calculation for the cost of living. The total number in the household will be used to derive the monthly living expenses.