Expanding your family is an exciting time that may force you to reconsider your living arrangements. If your current home is too small to accommodate your growing family or you want to move somewhere with better schools, it’s time to speak to a mortgage broker in Houston, TX. You can benefit from a maternity leave loan and end up in the ideal home for your family.
How do you apply for this special type of home loan? Champions Mortgage breaks down everything you need to know in this guide.
Communicate With Your Lender
Securing a mortgage during the home-buying process requires you to work with a lender who will oversee your application and review the necessary documents. By law, lenders can’t deny you a mortgage for being pregnant or on maternity leave. However, the mortgage approval process can be tricky for new parents on leave.
Be open with your lender and explain your situation. They will have tips for navigating the process despite your temporary income gap. Providing key information regarding your finances, including your debt-to-income ratio, helps a lender determine your loan eligibility and how much you can borrow.
Gather Financial Documents
A maternity leave loan application requires the same information that traditional borrowers provide lenders, such as:
- Pay stubs
- Bank statements
- Employer contact information
The main difference is that applicants on parental leave need to take their employment gap into consideration. Say you apply for a loan in March but went on maternity leave in January. You’ll need to give your lender pay stubs from the last three months before you took leave, which would be the previous October, November, and December, in this example.
In addition to income verification, lenders need to know your employment status to ensure you’ll make complete mortgage payments. They will confirm with your employer that you’ll return to work after maternity leave and earn the same income as your pay stubs show.
Tips for Making Your Loan Approval Process Smoother
Whether you’re applying for a maternity leave loan or not, there are a few things you can do to streamline the process and set yourself up for a positive outcome.
Focus on Saving
A temporary income gap might raise some red flags with lenders. Reassure you’re a trustworthy borrower by having a nest egg set aside for financial security.
Decrease Debt
Pay off as much debt as possible before applying for a loan. Mortgage brokers feel less confident approving applicants with an unfavorable debt-to-income ratio. Evaluate your total debt and try to pay off the smallest loan amount first before chipping away at larger amounts.
Many home loan applicants carry debt on the following:
- Student loans
- Car payments
- Credit cards
- Personal loans
The more you can minimize your debt, the better your application will look to a mortgage lender.
Compare Lenders
How can you be sure that you have the right lender to approve your maternity leave loan? The best way to approach this process is by comparing different lenders. Some may be more understanding of your situation while others hesitate to approve your loan because of your temporary income gap.
Connect With Our Lenders for a Seamless Mortgage Approval Process
At Champions Mortgage, we’ll help you apply for a maternity leave loan and answer any questions you have about securing a mortgage. Our specialists also help prospective homebuyers with bad credit mortgage approval and other unique circumstances. To learn how much you can borrow for a home loan, reach out to our team today.
Contact Champions Mortgage at (281) 727-2500 to speak with a lending expert; we’ll help you pursue your home ownership goals.
