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It’s usually better to apply for a home loan while you’re pregnant and still working rather than while on maternity leave. Some banks may be more willing to consider a loan application which involves maternity leave than others.

Pregnancy is only one element of an application the banks consider when making a decision. Being pregnant won’t see you penalised by a bank although it will be taken into consideration along with your entire personal circumstances. Your eligibility for a new home loan will depend on your individual personal situation.

The banks will make the decision on whether you’re eligible for the loan based on how much you’ve saved, your financial history, your particular employment arrangement and how much maternity (or paternity) leave you intend to take.

Proving to the bank that you live within your means will help the application. Generally the maximum period of leave that banks can consider is 12 months. They will view shorter periods such as 6 months or 18 weeks more favourably.

Fully Paid Maternity Leave is viewed most favourably by the banks. Part Paid Maternity Leave is a situation most people face. It is where you may only be paid half of your normal salary while on all or some of the leave. Therefore it is likely most banks won’t assess your loan based on your normal salary.

Unpaid Maternity Leave is treated by most banks as if you weren’t employed. Even if you have a set date to return to work, many will still not approve your loan until you’re actually back at your job.

But… with regard to Part Paid and Unpaid Maternity Leave, if you have savings in the bank that will cover the repayment shortfall for the mortgage while you’re taking time away from your employment, you’ve got a far greater chance of securing a mortgage.

What documentation do lenders require?

The banks will request that you supply evidence of your employment and income. You will usually be required to provide:

Last 2 consecutive Payslips (YTD covering the last 3 months).

Most recent PAYG Summary – showing YTD ( year to date)

A letter from your employer stating the terms of the parental leave, including the return date and the employment status upon return (full time, part time or casual) plus ongoing remuneration.

I read that lenders can’t ask about my maternity?

To an extent that is true but by law they all must ask if you are aware of any change in circumstances that effect your ability to repay your mortgage. You have a duty to disclose that information.

If you fail to disclose and something unforeseen causes you to default then a court may take a very dim view of your case. Google “obtaining financial advantage by deception”.

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